Using Social Media to Identify the Effects of Congressional Viewpoints on Asset Prices

64 Pages Posted: 12 Apr 2021 Last revised: 10 Nov 2023

See all articles by Francesco Bianchi

Francesco Bianchi

Johns Hopkins University; NBER; CEPR

Roberto Gomez Cram

New York University (NYU) - Leonard N. Stern School of Business

Howard Kung

London Business School; Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 3 versions of this paper

Date Written: July 14, 2023

Abstract

We use a high-frequency identification approach to document that individual politicians affect asset prices. We exploit the regular flow of viewpoints contained in Congress members' tweets. Supportive (critical) tweets increase (decrease) the stock prices of the targeted firm and the corresponding industry in minutes around the tweet. The bulk of the stock price effects is concentrated in the tweets revealing news about future legislative action. The effects are amplified around committee meeting days, especially when the tweet originates from committee members and influential politicians. Overall, we show that Congress members' social media accounts are an important source of political news.

Keywords: Asset pricing, political news, social media, high-frequency identification.

JEL Classification: D72, G14

Suggested Citation

Bianchi, Francesco and Gomez Cram, Roberto and Kung, Howard, Using Social Media to Identify the Effects of Congressional Viewpoints on Asset Prices (July 14, 2023). Available at SSRN: https://ssrn.com/abstract=3823756 or http://dx.doi.org/10.2139/ssrn.3823756

Francesco Bianchi

Johns Hopkins University ( email )

Baltimore, MD 20036-1984
United States
14127156283 (Phone)

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CEPR ( email )

London
United Kingdom

Roberto Gomez Cram (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Howard Kung

London Business School ( email )

Sussex Place
Regent's Park
London NW1 4SA
United Kingdom

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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