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Country-specific sentiment and security prices

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  • Hwang, Byoung-Hyoun
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    Abstract

    I study the effect of country-specific sentiment on security prices. I provide evidence that a country's popularity among Americans affects US investors' demand for securities from that country and causes security prices to deviate from their fundamental values. Moreover, I find that country popularity is positively associated with the intensity of US cross-border mergers and acquisitions activity, suggesting that country popularity also affects firms' investment decisions.

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    File URL: http://www.sciencedirect.com/science/article/B6VBX-51CVG3Y-1/2/0a780bc136f8a866e04d2658487a1ad7
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Financial Economics.

    Volume (Year): 100 (2011)
    Issue (Month): 2 (May)
    Pages: 382-401

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    Handle: RePEc:eee:jfinec:v:100:y:2011:i:2:p:382-401

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    Web page: http://www.elsevier.com/locate/inca/505576

    Related research

    Keywords: Investor sentiment Country popularity;

    References

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    Cited by:
    1. Möhlmann, Axel, 2013. "Investor home bias and sentiment about the country benefiting from the tax revenue," Journal of Economic Psychology, Elsevier, vol. 35(C), pages 31-46.
    2. Owen, Sian & Yawson, Alfred, 2013. "Information asymmetry and international strategic alliances," Journal of Banking & Finance, Elsevier, vol. 37(10), pages 3890-3903.
    3. Baker, Malcolm & Wurgler, Jeffrey & Yuan, Yu, 2012. "Global, local, and contagious investor sentiment," Journal of Financial Economics, Elsevier, vol. 104(2), pages 272-287.

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