The Influence of Media Slant on Short Sellers
52 Pages Posted: 8 Jun 2021 Last revised: 31 May 2023
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