Home-Country Media Slant and Cross-Listed Stocks: The Case of Automotive Industry

55 Pages Posted: 13 Jun 2019 Last revised: 25 Aug 2022

See all articles by Benjamin Golez

Benjamin Golez

University of Notre Dame

Rasa Karapandza

EBS Universität für Wirtschaft und Recht - EBS Business School - Department of Finance and Accounting; New York University (NYU) - New York University, Abu Dhabi

Date Written: August 24, 2022

Abstract

Is news reported more favorably in companies’ domestic newspapers than abroad? Do cross-country differences in media reporting reflect differences in investor sentiment? We test these hypotheses for the case of the automotive industry across the U.S., Germany, and Japan. Using comprehensive hand-coded news data, we show that companies obtain substantially more media coverage and are presented with a significantly more positive news tone in their home countries than abroad. The media slant increases during crisis periods and it predicts stock price deviations of cross-listed stocks. The predictive relation is strongest for news reported by journalists who have native-sounding names.

Keywords: media slant, media bias, textual analysis, investor sentiment, cross-listed stocks, confirmatory bias

JEL Classification: L82, D23, F23

Suggested Citation

Golez, Benjamin and Karapandza, Rasa, Home-Country Media Slant and Cross-Listed Stocks: The Case of Automotive Industry (August 24, 2022). Available at SSRN: https://ssrn.com/abstract=3396726 or http://dx.doi.org/10.2139/ssrn.3396726

Benjamin Golez (Contact Author)

University of Notre Dame ( email )

256 Mendoza College of Business
Notre Dame, IN 46556-5646
United States
(574) 631-1458 (Phone)

HOME PAGE: http://business.nd.edu/BenGolez/

Rasa Karapandza

EBS Universität für Wirtschaft und Recht - EBS Business School - Department of Finance and Accounting ( email )

Gustav-Stresemann-Ring 3
Wiesbaden, Hessen 65189
Germany

New York University (NYU) - New York University, Abu Dhabi ( email )

PO Box 129188
Abu Dhabi
United Arab Emirates

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