The Emergence of 'Social Executives' and Its Consequences for Financial Markets

Chen, Hailiang; Hwang, Byoung-Hyoun; Liu, Baixiao

doi:10.2139/ssrn.2318094

The Emergence of 'Social Executives' and Its Consequences for Financial Markets

45 Pages Posted: 31 Aug 2013 Last revised: 15 May 2019

See all articles by Hailiang Chen

Hailiang Chen

The University of Hong Kong - Faculty of Business and Economics

Byoung-Hyoun Hwang

Cornell University - Dyson School of Applied Economics and Management; Korea University - Department of Finance

Baixiao Liu

Florida State University

Date Written: April 2019

Abstract

We document the emergence of “social executives,” top executives who connect with investors directly, personally, and in real time through social media, and we study the consequences of this development for financial markets. We contend that the emergence of social executives enables investors to obtain value-relevant information to which they previously had no access, and that this enhancement to the information environment increases investor participation and improves stock market liquidity. Using data reflecting the personal Twitter account activity of the CEOs and CFOs of the largest publicly traded companies in the United States, we find evidence consistent with our hypothesis.

Keywords: Social executives, Social Media, Investors, Stock Markets

JEL Classification: G12, G14, G38, M41, M48

Suggested Citation: Suggested Citation

Chen, Hailiang and Hwang, Byoung-Hyoun and Liu, Baixiao, The Emergence of 'Social Executives' and Its Consequences for Financial Markets (April 2019). Available at SSRN: https://ssrn.com/abstract=2318094 or http://dx.doi.org/10.2139/ssrn.2318094