Impact of Foreign Investment News on the Return, Cost of Equity and Cash Flow Activities

Muhammad Ateeq ur Rehman (), Furman Ali () and Shang Xie ()
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Muhammad Ateeq ur Rehman: Research Institute of Economics and Management, Southwestern University of Finance and Economics, No. 555, Liutai Avenue, Chengdu 611130, China, ORCID ID: 0000-003-0680-8345.
Furman Ali: School of Finance, Southwestern University of Finance and Economics, No. 555, Liutai Avenue, Chengdu 611130, China.
Shang Xie: Research Institute of Economics and Management, Southwestern University of Finance and Economics, No. 555, Liutai Avenue, Chengdu 611130, China.

Journal for Economic Forecasting, 2022, issue 4, 112-127

Abstract: The print and electronic media are progressively renowned as a significant player in the prediction of business, especially firms' activities. We investigate whether foreign investment news can be one of the interesting news factors to determine the firm's activities, including the portfolio return, cost of equity and cash flow activities. This study adopts the lexicon-based approach via python's natural language toolkit to extract the news sentiment for each specific news day over the period 2009-2018. Through the panel regression and instrumental technique, we find that it is probable to develop a method to extract the information from foreign investment news that is valuable to predict the portfolio, cost of equity, and cash flow activities.

Keywords: foreign investment news; news sentiments; stock return; cost of equity; cash flow activities (search for similar items in EconPapers)
JEL-codes: C1 C58 O4 (search for similar items in EconPapers)
Date: 2022
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