Does the short-selling mechanism improve energy security? Evidence from China.

Reducing carbon emissions and improving energy efficiency are essential to respond to global climate change actively. However, improving energy security under resource and environmental constraints is the key for China to achieve high-quality and sustainable development. Thus, using the panel data at the enterprises and regional levels in China from 2013 to 2020, this research develops an energy security index to study the impact of the short-selling mechanism on energy security. The results show that China's energy security is generally on the rise under the short-selling mechanism. However, it has different degrees of impact on energy security in different energy structures, supply chains, and environments. In addition, China's energy security has a regional spillover effect under the short-selling mechanism's capital pressure and supervision governance. This paper also finds that short-selling can alleviate the supply chain's bullwhip effect and risk effect. Finally, the short-selling mechanism complements the micro-influence mechanism of energy security, and short-selling positively impacts China's energy security.