关键词: 卖空管制, 业绩目标设定, 产权性质

Abstract: Performance targets form a critical foundation for various internal and external activities for a firm, including budgeting, resource allocation, compensation incentives, and evaluation. By setting performance targets, firms integrate their vision and strategy into day-to-day operations. Performance target setting should not only consider economic factors such as market conditions but also align with the firm’s strategic and operational objectives. Firms with heterogeneous ownership structures have distinct operational objectives: private firms are primarily driven by profit motives, while state-owned enterprises (SOE) bear social responsibilities for maintaining the stability of the real economy and capital markets in addition to profitability. Focusing on China’s gradual deregulation of short-selling restrictions, our study employs a difference-in-differences model to examine how short selling influences the performance targets setting behavior for firms with different ownership structures. The short-selling deregulation allows negative information to be incorporated more timely into stock prices, leading to a decline in overvalued stock prices and an increase in stock price crash risk. On the other hand, short selling constrains the earnings management behaviors. In this scenario, would firms strategically adjust their performance targets? Are performance targets different between SOE and private firms with distinct responsibilities and motives?
This paper measures performance targets using budgeting data on sales revenue disclosed in the “Management Discussion and Analysis” section of listed companies’ annual reports. Based on the natural experiment of the gradual short-selling deregulation in China, this study employs a difference-in-differences model with a sample of A-share listed companies from 2007 to 2016, and finds that SOE lower their performance targets after short-selling deregulation, while no such effect is observed in private firms. A series of robustness tests, such as parallel trending tests, PSM-DID, and Heckman two-stage regression tests, indicate the robustness of our findings. Our further analysis reveals that our primary effect is more salient in SOE with limited future revenue manipulation space. Moreover, lowering performance targets promote the probability of beating the targets, further improving stock price crash risk for SOE. Overall, the research findings indicate that, after short-selling deregulation SOE set lower performance targets to increase the probability of meeting such targets and, consequently, alleviate stock price crash risk. Our findings suggest that SOE consider the need to maintain the stability of the capital market when setting performance targets.
Our research findings contribute to the existing literature on performance target setting, broaden the understanding of economic consequences of short selling, and facilitate a deeper understanding of the differentiated behaviors for firms with different ownership. Our research findings offer insights into the role of SOE in the capital market. Besides profit objectives, SOE also need to consider social responsibilities such as maintaining capital market stability. Abnormal stock price fluctuations hurt capital market stability, and thus, SOE need to take the lead in mitigating stock price fluctuations to safeguard capital market stability and prevent the outbreak of financial risks. On the other hand, although easier performance targets can prevent stock price crash risk, setting lower targets makes firms difficult to tap into its deeper potential, fails to reflect the genuine resource demands and consequently hinders the improvement of profitability. Therefore, SOE should balance profit and social demands in future reforms, stimulate their potential through incentive and governance mechanisms, and better serve the development of both the capital market and real economy.

Key words: short selling, target setting, ownership