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Country-specific sentiment and security prices

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  • Hwang, Byoung-Hyoun

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.

Suggested Citation

  • Hwang, Byoung-Hyoun, 2011. "Country-specific sentiment and security prices," Journal of Financial Economics, Elsevier, vol. 100(2), pages 382-401, May.
    • Handle: RePEc:eee:jfinec:v:100:y:2011:i:2:p:382-401
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