Living in the Digital Age: The Usefulness of Twitter, YouTube and Instagram in Corporate Communication

69 Pages Posted: 9 Jan 2019 Last revised: 13 Jun 2019

See all articles by Pawel Bilinski

Pawel Bilinski

Bayes Business School, City University London

Date Written: January 3, 2019

Abstract

This study examines the usefulness of Twitter, YouTube and Instagram in corporate communication. We document that Twitter communication helps investors interpret earnings news and associates with stronger price reactions to earnings announcements. YouTube videos and Instagram pictures have either negative or no effect on investors’ ability to understand earnings information. Further, firms that post on the three social platforms experience positive price reactions to earnings announcements regardless of the news content, which suggests that investors perceive social media communication to signal higher disclosure effort. The effects we document dominate in stocks with high retail ownership and are robust to endogeneity bias. Our results suggest not all social media platforms help investors interpret earnings news, though social media communication plays an important signalling role.

Keywords: social media, earnings announcements

Suggested Citation

Bilinski, Pawel, Living in the Digital Age: The Usefulness of Twitter, YouTube and Instagram in Corporate Communication (January 3, 2019). Available at SSRN: https://ssrn.com/abstract=3311183 or http://dx.doi.org/10.2139/ssrn.3311183

Pawel Bilinski (Contact Author)

Bayes Business School, City University London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

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