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Social media information dissemination and corporate bad news hoarding

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  • Feng He
  • Yaqian Feng
  • Lingbing Feng

Abstract

This paper investigates the role of social media in mitigating corporate bad news hoarding from a stock price crash risk perspective. Using a sample of public listed firms from 2008–2019, we find that social media (Guba) posts could significantly reduce firms’ stock price crash risks in the Chinese stock market. Furthermore, we find that the information intermediation function and complementary corporate governance function enable Guba to achieve such an effect. In addition, investor attention mediates the relationship between Guba posts and management withholding bad news. Our result still holds after a series of robustness checks, including an RDD approach.

Suggested Citation

  • Feng He & Yaqian Feng & Lingbing Feng, 2023. "Social media information dissemination and corporate bad news hoarding," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1503-1532, April.
    • Handle: RePEc:bla:acctfi:v:63:y:2023:i:s1:p:1503-1532
    DOI: 10.1111/acfi.12959
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