The Emergence of 'Social Executives' and Its Consequences for Financial Markets
Year: 2019
Type: preprint
Abstract: Corporate executives are becoming increasingly active on social media channels. This paper examines the economic consequences of such behavior for the underlying firms by looking at the personal Twitter activity of S&P 1500 CEOs/CFOs. Personal tweets contain news as well as reports on executives’ day-to-day activities, current interests, and mood. We provide evidence that, on the upside, personal tweets increase investor awareness and improve stock market liquidity. On the downside, tweets sometimes incite naive stock market reactions, thereby destabilizing prices. The SEC’s “embracement of social media” in April 2013 appears to have increased the “upside-effects”, while decreasing the “downside-effect”.
Source: SSRN Electronic Journal
Authors: Hailiang Chen, Byoung‐Hyoun Hwang, Baixiao Liu
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3133532284