Executive tweets

• Main Authors: Richard M.CROWLEY, HUANG, Wenli, LU, Hai
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: Social media; executives; dissemination; Twitter; executive effort; Accounting; Social Media
• Online Access: https://ink.library.smu.edu.sg/soa_research/1911; https://ink.library.smu.edu.sg/context/soa_research/article/2938/viewcontent/SSRN_id3975995.pdf
• Institution: Singapore Management University

We explore the tweeting behavior of S&P 1500 firms’ executives (CEOs and CFOs) and its market consequences during the period of 2011 to 2018. We document that executives tweet financial information related to their firms and time these tweets to firms’ major events, and that investors respond to executive tweets in addition to firm tweets. Using the latest machine learning techniques, we develop an innovative construct measuring the content similarity between executive tweets and firm tweets. We use this measure to disentangle whether the market reaction comes from new information or trust. We show evidence consistent with the view that investor reaction is driven by trust, as investors react more to information from executive Twitter accounts that is more content-wise similar to information already posted by firm Twitter accounts.