This paper explored the linkage between short selling and market stabilization. While financial and economic theory advocates the positive role played by short sellers for market stabilization, short sellers are frequently blamed for causing market decline and increasing the panic in falling...

Background and Empirical Predictions -- The Event Study Methodology -- Data, Full Sample and Variable Construction -- Difference in Abnormal Short Selling Activity Following Events of Large Positive Stock Price Changes -- Difference in Information Content of Extreme Short Selling Activity Events...