Social Media and Corruption
50 Pages Posted: 27 Sep 2012 Last revised: 26 Nov 2016
Date Written: November 25, 2016
Do new media promote accountability in non-democratic countries, where offline media are often suppressed? We show that blog posts, which exposed corruption in Russian state-controlled companies, had a negative causal impact on their market returns. For identification, we exploit the precise timing of blog posts by looking at within-day results with company-day fixed effects. Furthermore, we show that the posts are ultimately associated with higher management turnover and less minority shareholder conflicts. Taken together, our results suggest that social media can discipline corruption even in a country with limited political competition and heavily censored traditional media.
Keywords: political economy, financial markets, social media, governance
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