Research

Publications

The Influence of Media Slant on Short Sellers  (with April Knill, Baixiao Liu, and John McConnell)

Forthcoming, Journal of Corporate Finance

Abstract: Using the positive shift in tone of Fox News coverage of macroeconomic news after the Republican Bush election in 2000, we investigate whether media slant influences the investment decisions of short sellers. We find that firms headquartered in Republican-leaning townships with Fox News availability experienced a relative decrease in short interest post the 2000 election. We further find that the relative decrease is more pronounced for firms that are more subject to investors’ home bias. We interpret our findings to mean that short sellers, as sophisticated as they may be, are not immune to the slant in media coverage.

Keywords: Media Slant, Short Seller, Investment Decisions

JEL Classification: G11, G12, G14, G30, G32, G34

Presentations: 2022 Florida Finance Conference, 2022 FMA Association Conference, 2022 Southern Finance Association Conference*, Florida State University, Peking University*, Sichuan University*, 2023 China International Conference in Finance*, Southwest Jiaotong University*, Harbin Institute of Technology*, Southwest University of Political Science and Law*, 2024 Southwestern Finance Association Conference


Working Papers

2.  Negativity Bias and Cross-Border Mergers and Acquisitions 

Abstract: Using a hand-collected dataset of news articles from large U.S. media outlets, we investigate whether the negativity of such outlets regarding foreign countries affects the cross-border M&A decisions made by U.S. firms. We find that greater negativity by U.S. media outlets towards a foreign country leads U.S. firms to engage in less cross-border M&As within that country and to abandon more acquisition attempts within that country. We find evidence that these results are not driven by the information present within news articles, but by the negativity itself. The results are consistent with the notion that a negativity bias in media and inherent in human psychology affects corporate decisions.

Keywords: Mergers, Acquisitions, International Investment, Behavioral Finance, Media Slant, Corporate Investment Decisions

JEL Codes:  F21, G31, G34, G41


3. Inter-Country Corruption, the Liability of Foreignness, and the Value of Political Connections; New Data and Evidence (with Sadok El-Ghoul, Omrane Guedhami, and April Knill)

Abstract: We construct a novel dataset identifying 11,076 politically connected firms across 190 countries to investigate how the political environments of an MNC’s host country locations affect their likelihood of being politically connected. We find that MNCs with subsidiaries in more politically connected countries are more likely to be politically connected themselves. We further show that MNCs operating in more corrupt host countries are more likely to be politically connected. We find that this result holds for political connections established in the host country but not for political connections in the home country and that this result is driven primarily by those MNCs operating in the most corrupt environments. Finally, we find that establishment of political connections by MNCs operating in more corrupt host countries leads to a reduction in the MNC’s risk. We find that all of these results are driven primarily by MNCs from less corrupt countries and more influential political connections. 

Keywords: Political Connection, Political Strategies, Corruption, Multinational Corporation

JEL Classification: F23, F30, F59, D73


Works in Progress


4.  The Effect of Smart Sanctions on Banks: Evidence from Russia (with Sergey Mityakov and Casey Dougal)


5.  Firm Sociopolitical Stances: Antecedents and Outcomes (with Mark Buckwalter-Figueroa)


6.  The Value of Political Connections and ESG Outcomes (with Sadok El-Ghoul, Omrane Guedhami, and April Knill)