Country-specific sentiment and security prices |
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Authors: | Byoung-Hyoun Hwang |
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Affiliation: | Purdue University, Krannert School of Management, 403 West State Street, West Lafayette, IN 47907, USA |
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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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Keywords: | G12 G14 G15 |
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