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Social Media and Corruption

Author

Listed:
  • Ruben Enikolopov
  • Maria Petrova
  • Konstantin Sonin

Abstract

Does new media promote accountability in nondemocratic countries, where offline media is often suppressed? We show that blog posts, which exposed corruption in Russian state-controlled companies, had a negative causal impact on their market returns. For identification, we exploit the precise timing of blog posts by looking at within-day results with company-day fixed effects. Furthermore, we show that the posts are ultimately associated with higher management turnover and less minority shareholder conflicts. Taken together, our results suggest that social media can discipline corruption even in a country with limited political competition and heavily censored traditional media.

Suggested Citation

  • Ruben Enikolopov & Maria Petrova & Konstantin Sonin, 2018. "Social Media and Corruption," American Economic Journal: Applied Economics, American Economic Association, vol. 10(1), pages 150-174, January.
  • Handle: RePEc:aea:aejapp:v:10:y:2018:i:1:p:150-74
    Note: DOI: 10.1257/app.20160089
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    More about this item

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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