We argue that hedge funds more aggressively buy underpriced stocks when they can short and, as such, protect their stock purchases from industry fluctuations. We utilize the institutional feature in Hong Kong in virtue of which only stocks added to a special list can be shorted. Our first-stage...

Tunnelling by large shareholders is a problem representative of ownership concentration. Large shareholders may interfere with a firm's information disclosure to support their tunnelling behaviour, causing a high stock price crash risk. Using listed companies in China from 2001 to 2019 as a...