CORPORATE SOCIAL MEDIA ENGAGEMENT AND DIVIDEND PAYOUT POLICY OF INDONESIAN LISTED FIRMS

• Main Author: Suryajaya Eltanto, William
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/64596
• Institution: Institut Teknologi Bandung

Many studies examined the relations and predictive model from social media activity used by investors and the stock return. This study examine the social media engagement on Instagram platform and dividend policy of Indonesia listed firms. We find social media engagement is positively associated with dividend payout policy. Companies with high social media activity usually has higher dividend payout thus attracting retail investors who prefer dividend return as evidence consistent with dividend clienteles. High interaction on social media also give better prediction about firm’s earnings and dividend outcome, giving insight about social media as a platform for sharing value-relevant information and wisdom of crowd phenomenon. On management’s perspective, optimistic mood from the social media leads to a higher payout ratio. Finally, social media engagement of firm’s account gives insight on how well firm operates.