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Media Slant Against Foreign Owners: Downsizing

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  • Friebel, Guido

    ()
    (Goethe University Frankfurt)

  • Heinz, Matthias

    ()
    (Goethe University Frankfurt)

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    Abstract

    We establish the existence of strong media slant against foreign owners. Using a unique data set from nation-wide distributed quality newspapers in Germany, we find that a foreign firm that downsizes in Germany receives almost twice as much attention than a domestic firm. This quantitative slant is accompanied by qualitative slant; newspapers report in a more negative way about downsizing foreign than domestic firms. The slant is present in all quality newspapers, but it increases from right to left in the political spectrum. This is consistent with theory papers arguing that slant is an equilibrium phenomenon. The slant we document is a clean measure for economic xenophobia; however, not geared against migrants, but against foreign owners. The slant can be a substantial obstacle to FDI, as illustrated by case studies. Our results are likely to be a lower bound estimate, because Germans are rather globalization-friendly and we are looking at quality papers, not tabloids.

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    Bibliographic Info

    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6859.

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    Length: 53 pages
    Date of creation: Sep 2012
    Date of revision:
    Handle: RePEc:iza:izadps:dp6859

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    Related research

    Keywords: media economics; globalization; economic xenophobia; multi-national enterprises; foreign direct investment;

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    Cited by:
    1. Heinz, Matthias & Drzensky, Frank, 2013. "The Hidden Costs of Downsizing," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79764, Verein für Socialpolitik / German Economic Association.
    2. John P. Weche Geluebcke & Isabella Wedl, 2013. "Environmental Protection of Foreign Firms in Germany: Does the country of origin matter?," Working Paper Series in Economics 267, University of Lüneburg, Institute of Economics.

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