Do Firms Manage Their CSR Reputation? Evidence from Twitter

44 Pages Posted: 29 Oct 2019

See all articles by Richard M. Crowley

Richard M. Crowley

Singapore Management University

Wenli Huang

Hong Kong Polytechnic University

Hai Lu

University of Toronto - Rotman School of Management

Wei Luo

Peking University - Guanghua School of Management

Date Written: October 20, 2019

Abstract

Using a machine learning approach to process 11 million tweets posted by S&P 1500 firms from 2011 through 2016, we find that poor corporate social responsibility (CSR) performance firms tweet more about CSR activities and use tweets that are shorter, and with more passive voice and extreme tone. Good CSR performance firms tweet less about CSR, yet gain twice more followers per CSR tweet than poor CSR performance firms. Good CSR performance firms also experience a greater decrease in institutional ownership along with higher increases in bid-ask spread and stock return volatility after joining Twitter than do poor CSR performance firms. Our findings suggest that poor CSR performance firms play a greenwashing strategy, but this strategy is not effective in leading to capital market consequences.

Keywords: Social media, Twitter, Dissemination, Corporate social responsibility, Prosocial

JEL Classification: G14, L30, M14, M15, M40

Suggested Citation

Crowley, Richard M. and Huang, Wenli and Lu, Hai and Luo, Wei, Do Firms Manage Their CSR Reputation? Evidence from Twitter (October 20, 2019). Available at SSRN: https://ssrn.com/abstract=3472473

Richard M. Crowley

Singapore Management University ( email )

60 Stamford Road
Singapore 178900
Singapore

HOME PAGE: http://rmc.link

Wenli Huang

Hong Kong Polytechnic University ( email )

School of Accounting and Finance
Hung Hom, Kow Loon, Hong Kong
Hong Kong

Hai Lu (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Wei Luo

Peking University - Guanghua School of Management ( email )

Room 461 Guanghua Building
Peking University
Beijing, Beijing 100871
China

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