How Social Media Impacts Mass Media News Viewership in the Stock Market

40 Pages Posted: 24 Aug 2019 Last revised: 23 Sep 2019

See all articles by Jie Ren

Jie Ren

Fordham University

Hang Dong

IE University

Gaurav Sabnis

Stevens Institute of Technology - School of Business

Jeffrey V. Nickerson

Stevens Institute of Technology - School of Business

Date Written: August 23, 2019

Abstract

We explored in this study the impact of social media on the viewership of mass media news in the stock market. We argue that the popularity of a topic on social media can affect the viewership of news articles the next day on this same topic. Moreover, the detailed characteristics of how social media information is written can amplify this effect. Analyzing 1.4 million pieces of stock-related news and around 50 million stock-related social media posts for the years of 2013 and 2014 from Sina Finance and Sina Weibo, we found social media volume on a stock at time t-1 is associated with mass media news viewership on the same stock at time t; this effect increases when social media sentiment is more intense or more positive, or when the social media information source is more verifiable. Furthermore, we conducted causality tests to confirm the impact of social media on mass media news viewership. Our findings have implications for theory and practice, especially with respect to the design of news recommendation systems as well as recent policy and associated legislation that is based on an oversimplifying assumption that social media steals from the mass media audience.

Suggested Citation

Ren, Jie and Dong, Hang and Sabnis, Gaurav and Nickerson, Jeffrey V., How Social Media Impacts Mass Media News Viewership in the Stock Market (August 23, 2019). Available at SSRN: https://ssrn.com/abstract=3441840 or http://dx.doi.org/10.2139/ssrn.3441840

Jie Ren (Contact Author)

Fordham University ( email )

Rose Hill Campus Bronx
New York, NY 10458
United States

Hang Dong

IE University ( email )

Calle Cardenal Zuñiga, 12.
Segovia, 40003
Spain

Gaurav Sabnis

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

Jeffrey V. Nickerson

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

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