Does connection with @realDonaldTrump affect stock prices?
Year: 2018
Type: preprint
Abstract: This study investigates whether investors react to signals of an association between a firm and Donald Trump indicated by tweets containing both words 'Trump' (or '@realDonaldTrump') and a S&P500 firm name. Our results reveal that a large number of such tweets ignite speculations about a political connection between a firm and the US's President, thus affecting investors' trading behaviors. In particular, a rise in these tweets induces significant increases in trading volatility and trading volume. However, we do not find such great impacts on stock returns, suggesting that the speculations are more likely to spread among small non-institutional investors. Further investigations show that sentiments embedded in these tweets have limited influence. There is evidence of a changing market behavior towards such tweets centered by the President's inauguration.
Authors: Rui Fan, Oleksandr Talavera, Vu Tran
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2788323816