Corporate use of social media and market performance
DOI:
https://doi.org/10.11606/issn.1982-6486.rco.2020.169560Keywords:
Social media, Organizational performance, Brazilian companies, TwitterAbstract
Companies are being driven to use social media, however little is known about the impact of using these media on their performance. This study seeks to verify the relationship between the corporate use of social media and the market performance of Brazilian companies. To accomplish this, we will use ordinary least square (OLS) multiple linear regressions. The analysis period covers the years 2013 to 2017, and the sample consists of 225 companies. The use of social media corresponds to the use of Twitter for publishing financial information, while market performance was measured by abnormal returns on shares. The results reveal that the corporate use of social media has a positive relationship with performance. We conclude that the publication of tweets about financial information can maximize returns, which indicates that social media can be another source of information for stakeholders. This study contributes to the literature by showing real benefits obtained with the use of social media, and by demonstrating that the corporate use of Twitter influences capital market participants and, as a result, improves the organization's market performance. This evidence may motivate upper level corporate management to provide initial and continuous support for the use of social media.
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