The long and the short of it— uncovering the secrets of the stock market
The stock market is an ever-changing entity with highs and lows and trends that are meticulously followed and tracked. Efficiencies and inefficiencies in the market are also carefully followed. They are very important for businesses, investors and regulators and have a great impact on corporate investment. Researcher Dr Xiaohu Deng has spent his post graduate career studying these trends and figures to help provide clarity for business, government and students.
With a sharp eye on efficiencies and inefficiencies, Dr Deng has carefully examined stock market frictions and how they relate to real corporate activities such as general corporate investment, R&D and other capital expenditures.
Debunking the perceptions of a short sale
During his time as a PhD student at the University of Memphis in the United States, Deng’s supervisor suggested he look further into the concept of short selling. After reading more into this area, Dr Deng made it a focus of his research.
“With short selling, an investor can borrow shares from a broker and then in the future return the same number of shares. Investors will do that to buy lower priced stock and make a margin. It’s always risky because if the stock price goes in the opposite direction than expected the investor can suffer a loss.” says Dr Deng.
Because of this imposed risk, short selling has been viewed by many as volatile and destabilizing for the market but Dr Deng’s research provides a counter argument.
“Most papers before this research always focused on short selling and the destabilization of the market. We found the exact opposite.”
Finance and policy
Not only has Dr Deng’s work been eye opening for many in the finance world, but has also assisted policy makers.
“Our research provides implications to policy makers, which then helps businesses. Our study suggests that removing market restraints such as making short selling available helps corporate investment become more efficient.”
While collaborating with established scholars, Dr Deng has seen his research and works published in top tier finance, accounting and economics publications around the world. Although these published works have been big milestones in his research, Deng is on a mission to create a larger global impact by constantly turning over new research topics.
“My recent focus has been looking into the impact of political uncertainty and CEO attributes on the real economy, specifically using the example of the changeover between the Obama and Trump administration’s.”
Research that makes a difference
PhD in Finance, University of Memphis, 2017
MS in Quantitative Finance, Hofstra University, 2010
BA in Management, Wuhan University, 2007
Fields of Research
- Financial economics (380107)
- Finance (350202)
- Finance services (110201)
Journal Article(3 outputs)
|2021||Deng W, Jiang C, Young D, 'Short selling constraints and politically motivated negative information suppression', Journal of Corporate Finance ISSN 0929-1199 (2021) [Refereed Article]|
|2020||Deng X, Gao L, Kim JB, 'Short-sale constraints and stock price crash risk: causal evidence from a natural experiment', Journal of Corporate Finance Article 101498. ISSN 0929-1199 (2020) [Refereed Article]|
Citations: Scopus - 3Web of Science - 2
|2018||Deng X, Gao L, 'The monitoring of short selling: Evidence from China', Research in International Business and Finance, 43 pp. 68-78. ISSN 0275-5319 (2018) [Refereed Article]|
Citations: Scopus - 7Web of Science - 21
Chapter in Book(2 outputs)
|2021||Deng X, Goebert C, Morgulis G, Yates I, 'Municipal Bonds', Debt Markets and Products, Oxford University Press, Oxford, United Kingdom, pp. 200. (In Press) [Research Book Chapter]|
|2018||Deng X, Spieler AC, Tsang D, 'Livestock', Commodities: Markets, Performance, and Strategies, Oxford University Press, HK Baker, G Filbeck, and JH Harris (ed), Oxford, United Kingdom, pp. 175-193. ISBN 9780190656010 (2018) [Research Book Chapter]|
|PhD||Uncovered Short-Selling: Either good or bad around the world||2018|
|PhD||Modelling Beta Across Different Frequencies||2018|
|PhD||Does Capital Structure Matter to Non-Profit Institutions?||2019|
|PhD||High-Frequency Traders and their Impact on Financial Markets||2020|