https://hdl.handle.net/10419/82504 Department of Economics, Uppsala University 2026-11-06T03:58:24Z https://hdl.handle.net/10419/249372 Title: Language tone in financial news media and the cross-section of stock returns Authors: Bask, Mikael; Forsberg, Lars; Östling, Andreas Abstract: Based on 58,256 news articles published in the Financial Times during a 15-year period that cover companies in the DJIA, we find that a trading strategy that longs stocks with the most negative news and shorts stocks with the least negative news is not profitable. Consistent with this result, we also find that the sentiment factor derived from the negativism in the language tone in news articles is not a priced risk factor in the cross-section of stock returns. Nevertheless, the sentiment factor is significant for two-thirds of the stocks when it is added to well-known factor models. 2020-01-01T00:00:00Z https://hdl.handle.net/10419/249374 Title: A response to Pettersson-Lidbom's "Exit, voice and political change: Evidence from Swedish mass migration to the United States - a comment" Authors: Karadja, Mounir; Prawitz, Erik Abstract: In a comment to Karadja & Prawitz (2019), henceforth KP, Per Pettersson-Lidbom (2020), henceforth P-L, argues that the main results in KP are severely biased. He argues that KP's results are biased due to non-classical measurement error in emigration and due to confounders related to the instrument. In this response, we show that P-L's reasoning regarding measurement error bias contradicts the results from his proposed test. More generally, P-L's results cannot exclude alternative and arguably more likely explanations. We present two straightforward tests that both indicate that measurement error does not bias KP's results. Second, we argue that KP controls for confounders in a standard way given the identication strategy. Including fixed effects at the level of the exogenous cross-sectional variation, as P-L does, severely limits the available identifying variation and decreases precision. Nevertheless, we document that KP's results are robust to non-linear frost shock controls, including fixed effects for groups of similar frost shocks. In addition, we show that our results are robust to altering regional fixed effects or dropping them altogether, in contrast to what is suggested by P-L. 2020-01-01T00:00:00Z https://hdl.handle.net/10419/249373 Title: Intangible capital, markups and profits Authors: Sandström, Maria Abstract: Can an increasing importance of intangible capital explain increases in markups and profits? I use a heterogeneous firm model to show how intangible capital, characterized by fixed costs and uncertainty, is related to markups and profits at the industry level. The scalability and uncertainty properties of intangible capital imply that firms which succeed in their intangible capital investment can charge high markups relative to other firms whereas firms that fail will exit. However, these high markups do not imply any economic profits in the industry if they only serve to cover the total fixed costs of intangible capital. To empirically examine the relationship between intangible capital, markups and profits, I study average markups and profit shares in a panel of Swedish industries. There is evidence of a positive relationship between intangible capital and average industry markups. However, the evidence of the relationship between intangible capital and profits is less conclusive. 2020-01-01T00:00:00Z https://hdl.handle.net/10419/249370 Title: Divided they fall: Fragmented parliaments and government stability Authors: Carozzi, Felipe; Cipullo, Davide; Repetto, Luca Abstract: This paper studies how political fragmentation affects government stability. We show that each additional party with representation in Parliament increases the probability that the incumbent government is unseated by 4 percentage points. Governments with more resources at their disposal for bargaining are less likely to be replaced. When they are, new government leaders are younger and better educated, suggesting instability may induce positive selection. We interpret our results in light of a bargaining model of coalition formation featuring government instability. Our findings indicate that the rising fragmentation in parliaments worldwide may have a substantial impact on stability and political selection. 2020-01-01T00:00:00Z