Country-Specific Sentiment and Security Prices

In one sentence

Companies operating in less popular countries (among Americans) trade at a substantial discount in the US. Country popularity also affects foreign direct investment and cross-border mergers.

Summary

I provide evidence that a country’s popularity among Americans (as measured by Gallup Polls) affects US investors’ demand for securities tied to that country and causes prices to deviate from fundamentals. Country popularity also positively associates with the intensity of US cross-border M&A activity.

Research topics