This paper investigates the role of managerial biases in the real effects of limits to arbitrage. In a natural experiment setting with Regulation SHO, we find that the lifting of short sale constraints leads to a significant decrease in CEO confidence for pilot firms, and this result is more pronounced for pilot firms with financial constraints and stronger corporate governance. We further find that the real effects of Regulation SHO documented in the literature are primarily driven by CEOs with low confidence. Diffident CEOs of the pilot firms tend to decrease corporate investments, reduce earnings management, and improve social performance and employee relations following the removal of short sale constraints. Overall, we identify CEO confidence as a behavioral channel through which capital market frictions influence corporate decisions and CEO investments.

本文研究了管理偏见在套利限制的实际影响中的作用。在 SHO 监管的自然实验环境中，我们发现卖空限制的解除会导致试点公司 CEO 信心显着下降，对于财务约束和公司治理较强的试点公司来说，这一结果更为明显。我们进一步发现，文献中记录的 SHO 法规的真正影响主要是由信心不足的首席执行官推动的。试点公司的首席执行官在卖空限制取消后，往往会减少公司投资，减少盈余管理，改善社会绩效和员工关系。总体而言，我们将首席执行官信心视为资本市场摩擦影响公司决策和首席执行官投资的行为渠道。