Short selling and the probability of informed trading: Insights from interlocking directorate networks

Puntos clave

• Short selling significantly influences the probability of informed trading, potentially reshaping market dynamics.
• The analysis uses network theory to dissect how interlocking directorates impact information flow.
• Data reveals a correlation where enhanced connections between directors increase informed trading activities.
• These findings highlight a critical need for transparency in directorate networks to mitigate risks of information asymmetry.