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Media Slant Against Foreign Owners: Downsizing

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  • Friebel, Guido

    (Goethe University Frankfurt)

  • Heinz, Matthias

    (University of Cologne)

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.

Suggested Citation

  • Friebel, Guido & Heinz, Matthias, 2012. "Media Slant Against Foreign Owners: Downsizing," IZA Discussion Papers 6859, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp6859
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    Cited by:

    1. Bernhardt, Lea & Dewenter, Ralf & Thomas, Tobias, 2020. "Watchdog or loyal servant? Political media bias in US newscasts," DICE Discussion Papers 348, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Piolatto, Amedeo & Schuett, Florian, 2015. "Media competition and electoral politics," Journal of Public Economics, Elsevier, vol. 130(C), pages 80-93.
    3. Heinz, Matthias & Swinnen, Johan, 2015. "Media slant in economic news: A factor 20," Economics Letters, Elsevier, vol. 132(C), pages 18-20.
    4. Garz, Marcel & Sörensen, Jil, 2017. "Politicians under investigation: The news Media's effect on the likelihood of resignation," Journal of Public Economics, Elsevier, vol. 153(C), pages 82-91.
    5. Graham Beattie & Ruben Durante & Brian Knight & Ananya Sen, 2021. "Advertising Spending and Media Bias: Evidence from News Coverage of Car Safety Recalls," Management Science, INFORMS, vol. 67(2), pages 698-719, February.
    6. 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.
    7. Andrea Bassanini & Eve Caroli & Francois Fontaine & Antoine Rebérioux, 2019. "Escaping Social Pressure: Fixed-Term Contracts in Multi-Establishment Firms," Working Papers halshs-01724188, HAL.
    8. Gambaro, Marco & Puglisi, Riccardo, 2015. "What do ads buy? Daily coverage of listed companies on the Italian press," European Journal of Political Economy, Elsevier, vol. 39(C), pages 41-57.
    9. Andrea Bassanini & Eve Caroli & Bruno Chaves Ferreira & Antoine Reberioux, 2020. "Don’t Downsize This! Social Reactions to Mass Dismissals on Twitter," Post-Print halshs-03012930, HAL.
    10. Friebel, Guido & Heinz, Matthias & Zubanov, Nick, 2016. "The Effect of Announced Downsizing on Workplace Performance: Evidence from a Retail Chain," IZA Discussion Papers 9739, Institute of Labor Economics (IZA).
    11. Thomas, Tobias, 2020. "Zur Rolle der Medien in der Demokratie," Research Papers 12, EcoAustria – Institute for Economic Research.
    12. Ralf Dewenter & Uwe Dulleck & Tobias Thomas, 2020. "Does the 4th estate deliver? The Political Coverage Index and its application to media capture," Constitutional Political Economy, Springer, vol. 31(3), pages 292-328, September.
    13. Maxim Ananyev & Michael Poyker & Yuan Tian, 2021. "The safest time to fly: pandemic response in the era of Fox News," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(3), pages 775-802, July.
    14. Heinz, Matthias & Drzensky, Frank, 2013. "The Hidden Costs of Downsizing," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79764, Verein für Socialpolitik / German Economic Association.
    15. Dewenter, Ralf & Dulleck, Uwe & Thomas, Tobias, 2018. "The political coverage index and its application to government capture," Research Papers 6, EcoAustria – Institute for Economic Research.
    16. Schulz, Ann-Christine & Johann, Sarah, 2018. "Downsizing and the fragility of corporate reputation: An analysis of the impact of contextual factors," Scandinavian Journal of Management, Elsevier, vol. 34(1), pages 40-50.
    17. Dewenter, Ralf & Linder, Melissa & Thomas, Tobias, 2018. "Can media drive the electorate? The impact of media coverage on party affiliation and voting intentions," Research Papers 7, EcoAustria – Institute for Economic Research.
    18. Hirsch, Patrick & Köhler, Ekkehard A. & Feld, Lars P. & Thomas, Tobias, 2020. ""Whatever it takes!": How tonality of TV-news affects government bond yield spreads during crises," Freiburg Discussion Papers on Constitutional Economics 20/09, Walter Eucken Institut e.V..
    19. Andrea Mangani, 2021. "Media bias against women in music: an empirical analysis of Italian music magazines," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(2), pages 657-676, July.
    20. Dewenter, Ralf & Linder, Melissa & Thomas, Tobias, 2019. "Can media drive the electorate? The impact of media coverage on voting intentions," European Journal of Political Economy, Elsevier, vol. 58(C), pages 245-261.
    21. Matthias Heinz & Johan Swinnen, 2013. "Media Bias in Economic News: A Factor 20," LICOS Discussion Papers 33013, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    22. Andrea Mangani, 0. "Media bias against women in music: an empirical analysis of Italian music magazines," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 0, pages 1-20.
    23. repec:hrv:faseco:33078973 is not listed on IDEAS

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    More about this item

    Keywords

    multi-national enterprises; economic xenophobia; globalization; media economics; foreign direct investment;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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