The Influence of Media Slant on Short Sellers

Knill, April M.; Liu, Baixiao; McConnell, John J.; McKenzie, Glades

doi:10.2139/ssrn.3861847

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The Influence of Media Slant on Short Sellers

52 Pages Posted: 8 Jun 2021 Last revised: 31 May 2023

See all articles by April M. Knill

April M. Knill

University of South Carolina; Florida State University College of Business; Florida State University - College of Law

Glades McKenzie

Florida State University, Department of Finance, Students

Date Written: June 8, 2021

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

Suggested Citation: Suggested Citation

Knill, April M. and Liu, Baixiao and McConnell, John J. and McKenzie, John, The Influence of Media Slant on Short Sellers (June 8, 2021). Available at SSRN: https://ssrn.com/abstract=3861847 or http://dx.doi.org/10.2139/ssrn.3861847