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Social Media and Corruption

Author

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  • 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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    Cited by:

    1. Potrafke, Niklas, 2019. "Electoral cycles in perceived corruption: International empirical evidence," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 215-224.
    2. Daron Acemoglu & Tarek A. Hassan & Ahmed Tahoun, 2018. "The Power of the Street: Evidence from Egypt’s Arab Spring," Review of Financial Studies, Society for Financial Studies, vol. 31(1), pages 1-42.
    3. Bjørnskov, Christian & Freytag, Andreas & Gutmann, Jerg, 2018. "Coups, Regime Transition, and the Dynamics of Press Freedom," Working Paper Series 1225, Research Institute of Industrial Economics.
    4. Oasis Kodila-Tedika, 2021. "Natural resource governance: does social media matter?," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 34(1), pages 127-140, April.
    5. Andrea Geraci & Mattia Nardotto & Tommaso Reggiani & Fabio Sabatini, 2018. "Broadband Internet and Social Capital," MUNI ECON Working Papers 2018-01, Masaryk University, revised Dec 2018.
    6. Roy Cerqueti & Raffaella Coppier & Gustavo Piga, 2021. "Bribes, Lobbying and Industrial Structure," CEIS Research Paper 511, Tor Vergata University, CEIS, revised 11 Mar 2021.
    7. Günther G. Schulze & Nikita Zakharov, 2018. "Corruption in Russia - Historic Legacy and Systemic Nature," CESifo Working Paper Series 6864, CESifo.
    8. Jha, Chandan Kumar & Kodila-Tedika, Oasis, 2020. "Does social media promote democracy? Some empirical evidence," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 271-290.
    9. von Essen, Emma & Jansson, Joakim, 2020. "Misogynistic and xenophobic hate language online: a matter of anonymity," Working Paper Series 7/2020, Stockholm University, Swedish Institute for Social Research.
    10. 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.
    11. Xiong, Yan & Zhao, Yan, 2021. "Guanxi, media coverage and IPO approvals: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 65(C).
    12. Rui Fan & Oleksandr Talavera & Vu Tran, 2020. "Social media bots and stock markets," European Financial Management, European Financial Management Association, vol. 26(3), pages 753-777, June.
    13. Rui Fan & Oleksandr Talavera & Vu Tran, 2018. "Does connection with @realDonaldTrump affect stock prices?," Working Papers 2018-07, Swansea University, School of Management.
    14. Malakhov, Dmitry, 2018. "Internet usage and TV and online media trust: Case of Russia," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 50, pages 67-89.
    15. Rui Fan & Oleksandr Talavera & Vu Tran, 2020. "Social media, political uncertainty, and stock markets," Review of Quantitative Finance and Accounting, Springer, vol. 55(3), pages 1137-1153, October.
    16. Campa, Pamela, 2018. "Press and leaks: Do newspapers reduce toxic emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 184-202.
    17. Tolu Olarewaju & Jagannadha Pawan Tamvada & Sharin McDowall, 2021. "Generalised Trust and Relation Centrism for Corruption: Evidence from Low- and Middle-Income Countries," Discussion Papers 21-01, Department of Economics, University of Birmingham.

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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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