Negative News and Investor Trust: The Role of $Firm and #CEO Twitter Use

W. Brooke Elliott, Stephanie M. Grant, Frank D. Hodge

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish (US)
Pages (from-to)1483-1519
Number of pages37
JournalJournal of Accounting Research
Issue number5
StatePublished - Dec 2018


  • G11
  • G40
  • M41
  • Twitter
  • investment decisions
  • negative earnings surprise
  • repeated information
  • social bond
  • social media
  • trust

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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