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Facebook drives behavior of passive households in stock markets

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Listed:
  • Milla Siikanen
  • Kk{e}stutis Baltakys
  • Juho Kanniainen
  • Ravi Vatrapu
  • Raghava Mukkamala
  • Abid Hussain

Abstract

Recent studies using data on social media and stock markets have mainly focused on predicting stock returns. Instead of predicting stock price movements, we examine the relation between Facebook data and investors' decision making in stock markets with a unique data on investors' transactions on Nokia. We find that the decisions to buy versus sell are associated with Facebook data especially for passive households and also for nonprofit organizations. At the same time, it seems that more sophisticated investors---financial and insurance institutions---are behaving independently from Facebook activities.

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  • Milla Siikanen & Kk{e}stutis Baltakys & Juho Kanniainen & Ravi Vatrapu & Raghava Mukkamala & Abid Hussain, 2017. "Facebook drives behavior of passive households in stock markets," Papers 1709.07300, arXiv.org, revised May 2018.
    • Handle: RePEc:arx:papers:1709.07300
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    References listed on IDEAS

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    Cited by:

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    2. Zhang, Tonghui & Yuan, Ying & Wu, Xi, 2020. "Is microblogging data reflected in stock market volatility? Evidence from Sina Weibo," Finance Research Letters, Elsevier, vol. 32(C).
    3. Niţoi, Mihai & Pochea, Maria Miruna, 2022. "The nexus between bank connectedness and investors’ sentiment," Finance Research Letters, Elsevier, vol. 44(C).
    4. Patricio Ramírez-Correa & Elizabeth E. Grandón & Muriel Ramírez-Santana & Leonard Belmar Órdenes, 2019. "Explaining the Use of Social Network Sites as Seen by Older Adults: The Enjoyment Component of a Hedonic Information System," IJERPH, MDPI, vol. 16(10), pages 1-11, May.
    5. Baltakys, Kȩstutis & Baltakienė, Margarita & Kärkkäinen, Hannu & Kanniainen, Juho, 2019. "Neighbors matter: Geographical distance and trade timing in the stock market," Finance Research Letters, Elsevier, vol. 31(C).
    6. khan Feroz, Noushad & Hassan, Gazi & Cameron, Michael P., 2022. "To what extent do network effects moderate the relationship between social media propagated news and investors’ perceptions?," Research in Economics, Elsevier, vol. 76(3), pages 170-188.
    7. Margarita Baltakienė & Kęstutis Baltakys & Juho Kanniainen & Dino Pedreschi & Fabrizio Lillo, 2019. "Clusters of investors around initial public offering," Palgrave Communications, Palgrave Macmillan, vol. 5(1), pages 1-14, December.
    8. Jin, Xuejun & Zhu, Yu & Huang, Ying Sophie, 2019. "Losing by learning? A study of social trading platform," Finance Research Letters, Elsevier, vol. 28(C), pages 171-179.
    9. Baltakienė, Margarita & Kanniainen, Juho & Baltakys, Kęstutis, 2021. "Identification of information networks in stock markets," Journal of Economic Dynamics and Control, Elsevier, vol. 131(C).
    10. Santiago, Andrea & Pandey, Shweta & Manalac, Ma. Theresa, 2019. "Family presence, family firm reputation and perceived financial performance: Empirical evidence from the Philippines," Journal of Family Business Strategy, Elsevier, vol. 10(1), pages 49-56.

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