Abstract
Original language | English (US) |
---|---|
Number of pages | 59 |
DOIs | |
State | Published - May 31 2015 |
Fingerprint
Keywords
- social media
- social bond
- trust
- investment decisions
- negative earnings surprise
- repeated information
Cite this
Negative News and Investor Trust : The Role of $Firm and #CEO Twitter Use. / Elliott, W. Brooke; Grant, Stephanie M.; Hodge, Frank Douglas.
2015.Research output: Working paper
}
TY - UNPB
T1 - Negative News and Investor Trust
T2 - The Role of $Firm and #CEO Twitter Use
AU - Elliott, W. Brooke
AU - Grant, Stephanie M.
AU - Hodge, Frank Douglas
PY - 2015/5/31
Y1 - 2015/5/31
N2 - We examine how CEOs can facilitate the development of investor trust that helps mitigate the effects of negative information. Results from an experiment show that investors trust the CEO more and are more willing to invest in the firm when the CEO communicates firm news followed by a negative earnings surprise through a personal Twitter account than when the news and surprise comes from the CEO via a website or from the firm’s Investor Relations Twitter account or website. A follow-up experiment shows that repeating the negative news does not incrementally affect investors who received the news from the CEO’s Twitter account, but does further negatively impact investors who received the news via other disclosure mediums, especially those who received the news via the Investor Relations Twitter account. Our results have implications for firms and executives considering the costs and benefits of communicating with investors via Twitter.
AB - We examine how CEOs can facilitate the development of investor trust that helps mitigate the effects of negative information. Results from an experiment show that investors trust the CEO more and are more willing to invest in the firm when the CEO communicates firm news followed by a negative earnings surprise through a personal Twitter account than when the news and surprise comes from the CEO via a website or from the firm’s Investor Relations Twitter account or website. A follow-up experiment shows that repeating the negative news does not incrementally affect investors who received the news from the CEO’s Twitter account, but does further negatively impact investors who received the news via other disclosure mediums, especially those who received the news via the Investor Relations Twitter account. Our results have implications for firms and executives considering the costs and benefits of communicating with investors via Twitter.
KW - social media
KW - Twitter
KW - social bond
KW - trust
KW - investment decisions
KW - negative earnings surprise
KW - repeated information
U2 - 10.2139/ssrn.2612444
DO - 10.2139/ssrn.2612444
M3 - Working paper
BT - Negative News and Investor Trust
ER -