The Battle of Social Media Platforms: The Use of Twitter, Youtube and Instagram in Corporate Communication

52 Pages Posted: 9 Jan 2019

See all articles by Pawel Bilinski

Pawel Bilinski

City University London - Sir John Cass Business School

Date Written: January 3, 2019

Abstract

This study examines whether corporate communication through Twitter, YouTube and Instagram facilitates dissemination of earnings news. We build on the investor inattention hypothesis and document that low-attention firms, captured by low analyst coverage and earnings growth potential, are more likely to announce earnings news on social media. Independently of the news content, investors react more positively and exhibit lower heterogeneity in earnings expectations if firms communicate on the three social platforms. Twitter posts increase earnings response coefficients and the effect is stronger among retail investors. YouTube videos and Instagram pictures have either negative or no effect on investors’ ability to interpret earnings news. Our results suggest not all social media platforms help investors interpret earnings news, though social media communication is perceived to signal commitment to transparency.

Keywords: social media, earnings announcements

Suggested Citation

Bilinski, Pawel, The Battle of Social Media Platforms: The Use 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)

City University London - Sir John Cass Business School ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

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