Abstract

http://ssrn.com/abstract=2153378
 


 



Social Media and Financial Markets: Evidence from Russia


Ruben Enikolopov


Institute for Political Economy and Governance; Universitat Pompeu Fabra; New Economic School

Maria Petrova


Institute for Political Economy and Governance, Barcelona; Universitat Pompeu Fabra; Barcelona Graduate School of Economics (Barcelona GSE); New Economic School (NES)

Konstantin Sonin


Higher School of Economics; Centre for Economic Policy Research (CEPR)

February 26, 2015


Abstract:     
Can publications in social media have a causal impact in financial markets? Can blog posts have a long-term effect on the behavior of companies? Do non-informative posts distract traders’ attention? We address these questions by analyzing the impact of posts made by a popular Russian blogger, Aleksei Navalny. For identification, we combine two approaches: First, we analyze the precise timing of blog posts not preceded by mentions of companies in any alternative news source. Second, we use the evidence from distributed-denial-of-service (DDoS) attacks on other blogs that prevented the whole blog platform from being accessible for some users. We also use the incidence of popular posts by other bloggers that are not related to financial markets to show that less attention implies that the impact of Navalny’s posts is smaller. Finally, we show that some posts have a long-term impact on returns and are associated with real-life changes in the companies, such as higher management turnover and fewer conflicts with minority shareholders.

Number of Pages in PDF File: 50

Keywords: political economy, financial markets, social media, governance

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Date posted: September 27, 2012 ; Last revised: February 27, 2015

Suggested Citation

Enikolopov, Ruben and Petrova, Maria and Sonin, Konstantin, Social Media and Financial Markets: Evidence from Russia (February 26, 2015). Available at SSRN: http://ssrn.com/abstract=2153378 or http://dx.doi.org/10.2139/ssrn.2153378

Contact Information

Ruben Enikolopov
Institute for Political Economy and Governance ( email )
Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain
Universitat Pompeu Fabra ( email )
Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain
New Economic School ( email )
47 Nakhimovsky Prospekt
Moscow, 117418
Russia
Maria Petrova (Contact Author)
Institute for Political Economy and Governance, Barcelona ( email )
Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain
Universitat Pompeu Fabra ( email )
Ramon Trias Fargas, 25-27
Barcelona, E-08005
Spain
Barcelona Graduate School of Economics (Barcelona GSE) ( email )
Ramon Trias Fargas, 25-27
Barcelona, Barcelona 08005
Spain
New Economic School (NES) ( email )
47 Nakhimovsky Prospekt
Moscow, 117418
Russia
Konstantin Sonin
Higher School of Economics ( email )
20 Myasnitskaya street
Moscow, 119017
Russia

Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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