【文章內(nèi)容簡介】 othesis, inside ownership is positively associated with the shortinterest ratio. Short sellers may bee more active as managers are entrenched through greater ownership. Another plausible explanation suggests insiders may hedge their stock holdings. As inside holdings are sometimes offset by positions in collars, swaps, and other derivatives, with financial institutions that facilitate these transactions reducing their own risk by short selling stock, a positive relation between inside ownership and the shortinterest ratio may arise. Our results do not indicate that corporate policies preventing insiders from holding shares in margin accounts exhibit significant pressure on the ability to borrow shares for short selling. Our analysis rejects HI, and it represents the first research to document the effect of inside ownership on short interest. Our second hypothesis states that short interest is unrelated to institutional ownership, and it is also rejected by the data in our study. Both equations in Table 3 show that higher institutional ownership results in lower short interest. On the surface, these results seem to contradict D39。Avolio(2021) where he shows that institutional ownership explains a significant portion of the variability in loan supply. However, the apparent inconsistency is likely a result of the characteristics of our sample, which consists of the largest Nasdaq stocks. D39。Avolio finds 1,267 stocks that are unavailable for borrowing from a large institutional lending intermediary。 86% of these stocks are in the bottom size decile and 57% are priced under $5. The mean price of the stocks in our sample is $ and the average institutional ownership is %. Thus, the stocks that are most difficult to borrow from institutions are typically not among the largest 200 firms on the Nasdaq. Recent research on mutual funds finds that managers purchase stocks that have subsequent positive abnormal returns. Wermers (2021) estimates these abnormal returns are % per year before accounting for transactions costs. Pinnuck (2021) provides support for this conclusion. As at least some institutional investors have superior ability to pick stocks, short sellers may be less active in stocks with increasing institutional ownership and few constraints on borrowing. As well, institutional buyers may be less inclined to margin their stock, and this could reduce stock supplies for lending to short sellers as institutional ownership increases. Our third hypothesis states that transaction costs and short interest are unrelated. For both equations, the mean coefficient for the bidask spread is negative and significant, and the estimated coefficients for the number of market makers and share volume are positive and significant. These results reject H3 and are consistent with the idea that transaction costs are important impediments to short selling. This study is among the first to provide evidence that short sellers have a preference for stocks with more market makers. Like transaction costs, dividends are an impediment to short selling. Table 3 shows that stocks paying dividends have lower short interest. When dividends are issued, stock prices typically fall by less than the dividend and this represents a cost to short selling, absent any allowance for the dividend payment itself. Available options are also associated with increased short interest ratios. Consistent with Figlewski and Webb (1993) and Danielson and Sorescu (2021), our analysis indicates that stocks with exchangetraded options have higher short interest. Extending Dechow et al. (2021), we include the pricetoearnings ratio and the pricetobook ratio in our expressions. The mean coefficients for these variables are positive in both equations, and this result affirms the earlier research. As the coefficient for the prior return is negative, the data also suggest that short sellers take into account momentum, which is a pattern documented by Jegadeesh and Titman (1993). The last variables in this porti