We examine how U.S.-China geopolitical tensions affect the informational role of activist short sellers. Using hand-collected data on 183 reports targeting U.S.-listed Chinese firms from 2010 to 2020, we find that campaign activity increases during high-tension periods, driven by follow-up reports on already-targeted firms rather than new investigations. Reports released during these periods contain more negative language, are associated with larger but reversing price declines, and include fraud allegations less likely to be verified. These patterns suggest that geopolitical tensions shift activist short selling from price discovery toward bear-raid-type activity.

Using transaction data from the first half of 2020, we examine the reaction of corporate credit spreads to the Federal Reserve’s monetary policy announcements. We find evidence that the bond markets are segmented across credit ratings, which led to different initial reactions across bonds with different credit ratings but spread across various sectors of corporate bonds over the longer event window. To quantify the default risk channel of quantitative easing, we apply the variance decomposition approach to credit spreads and find that a significant fraction of credit spread changes indeed correspond to reduced default risk caused by the corporate bond purchase program. In contrast, we only find mixed evidence for the liquidity channel driving the market reaction.