IDEAS home Printed from https://ideas.repec.org/a/bla/jinfst/v72y2021i9p1183-1197.html

How does social media sentiment impact mass media sentiment? A study of news in the financial markets

Author

Listed:
  • Jie Ren
  • Hang Dong
  • Balaji Padmanabhan
  • Jeffrey V. Nickerson

Abstract

Mass media sentiment of financial news significantly influences investment decisions of investors. Hence, studying how this sentiment emerges is important. In years past, this was straightforward, often dictated by journalists who cover financial news, but this has become more complex now. In this paper, we focus on how social media sentiment affects mass media sentiment. Using data from Sina Weibo and Sina Finance (around 60 million weibos and 6.2 million news articles), we show that social media does influence mass media sentiment emergence for financial news. The sentiment consistency between social media reaction and prior news articles amplifies the persistence of mass media sentiment over time. By contrast, we found limited evidence of social media reducing the persistence of mass media sentiment over time. The results have significant implications for understanding how 2 types of media, treated separately in the literature, may be connected.

Suggested Citation

  • Jie Ren & Hang Dong & Balaji Padmanabhan & Jeffrey V. Nickerson, 2021. "How does social media sentiment impact mass media sentiment? A study of news in the financial markets," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 72(9), pages 1183-1197, September.
    • Handle: RePEc:bla:jinfst:v:72:y:2021:i:9:p:1183-1197
    DOI: 10.1002/asi.24477
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/asi.24477
    Download Restriction: no
    File URL: https://libkey.io/10.1002/asi.24477?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Nicola Botting & Lucy Dipper & Katerina Hilari, 2017. "The effect of social media promotion on academic article uptake," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 68(3), pages 795-800, March.
    2. Larcinese, Valentino & Puglisi, Riccardo & Snyder, James M., 2011. "Partisan bias in economic news: Evidence on the agenda-setting behavior of U.S. newspapers," Journal of Public Economics, Elsevier, vol. 95(9), pages 1178-1189.
    3. Matthew Gentzkow & Jesse M. Shapiro, 2010. "What Drives Media Slant? Evidence From U.S. Daily Newspapers," Econometrica, Econometric Society, vol. 78(1), pages 35-71, January.
    4. Paul C. Tetlock & Maytal Saar‐Tsechansky & Sofus Macskassy, 2008. "More Than Words: Quantifying Language to Measure Firms' Fundamentals," Journal of Finance, American Finance Association, vol. 63(3), pages 1437-1467, June.
    5. Siqi Zheng & Jianghao Wang & Cong Sun & Xiaonan Zhang & Matthew E. Kahn, 2019. "Air pollution lowers Chinese urbanites’ expressed happiness on social media," Nature Human Behaviour, Nature, vol. 3(3), pages 237-243, March.
    6. Paul C. Tetlock, 2011. "All the News That's Fit to Reprint: Do Investors React to Stale Information?," The Review of Financial Studies, Society for Financial Studies, vol. 24(5), pages 1481-1512.
    7. Matthew Gentzkow & Jesse M. Shapiro, 2008. "Competition and Truth in the Market for News," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 133-154, Spring.
    8. Sihai Li & Xianzhong Song & Huiying Wu, 2015. "Political Connection, Ownership Structure, and Corporate Philanthropy in China: A Strategic-Political Perspective," Journal of Business Ethics, Springer, vol. 129(2), pages 399-411, June.
    9. Thomas Renault, 2017. "Intraday online investor sentiment and return patterns in the U.S. stock market," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03205113, HAL.
    10. Jiao, Peiran & Veiga, André & Walther, Ansgar, 2020. "Social media, news media and the stock market," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 63-90.
    11. Kenneth R. Ahern & Denis Sosyura, 2014. "Who Writes the News? Corporate Press Releases during Merger Negotiations," Journal of Finance, American Finance Association, vol. 69(1), pages 241-291, February.
    12. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.
    13. Casey Dougal & Joseph Engelberg & Diego García & Christopher A. Parsons, 2012. "Journalists and the Stock Market," The Review of Financial Studies, Society for Financial Studies, vol. 25(3), pages 639-679.
    14. Dashan Huang & Fuwei Jiang & Jun Tu & Guofu Zhou, 2015. "Investor Sentiment Aligned: A Powerful Predictor of Stock Returns," The Review of Financial Studies, Society for Financial Studies, vol. 28(3), pages 791-837.
    15. Xueming Luo & Jie Zhang & Wenjing Duan, 2013. "Social Media and Firm Equity Value," Information Systems Research, INFORMS, vol. 24(1), pages 146-163, March.
    16. Paul C. Tetlock, 2007. "Giving Content to Investor Sentiment: The Role of Media in the Stock Market," Journal of Finance, American Finance Association, vol. 62(3), pages 1139-1168, June.
    17. Paul C. Tetlock, 2014. "Information Transmission in Finance," Annual Review of Financial Economics, Annual Reviews, vol. 6(1), pages 365-384, December.
    18. repec:bla:jfinan:v:59:y:2004:i:3:p:1259-1294 is not listed on IDEAS
    19. Jonathan Reuter & Eric Zitzewitz, 2006. "Do Ads Influence Editors? Advertising and Bias in the Financial Media," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 197-227.
    20. Renault, Thomas, 2017. "Intraday online investor sentiment and return patterns in the U.S. stock market," Journal of Banking & Finance, Elsevier, vol. 84(C), pages 25-40.
    21. JaeHong Park & Prabhudev Konana & Bin Gu & Alok Kumar & Rajagopal Raghunathan, 2013. "Information Valuation and Confirmation Bias in Virtual Communities: Evidence from Stock Message Boards," Information Systems Research, INFORMS, vol. 24(4), pages 1050-1067, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Yuchen & Zheng, Xiaochuan & Wu, Chuanhui & Zhou, Yusheng & Fan, Hao, 2024. "Understanding the health misinformation dissemination on Twitter: The perspective of tweets-comments consistency," Technology in Society, Elsevier, vol. 77(C).
    2. Li Wenyi & Ni Jun & Rong Mengjie, 2024. "Blockchain technology, social media sentiment and stock price," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 64(S1), pages 4885-4913, December.
    3. Kim, Jikyung (Jeanne) & Dong, Hang & Choi, Jeonghye & Chang, Sue Ryung, 2022. "Sentiment change and negative herding: Evidence from microblogging and news," Journal of Business Research, Elsevier, vol. 142(C), pages 364-376.
    4. Shuhong Wang & Xiaojing Yi & Malin Song, 2023. "The interrelationship of air quality, investor sentiment, and stock market liquidity: a review of China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(10), pages 10955-10973, October.
    5. Zhenhua Wang & Simin He & Guang Xu & Ming Ren, 2024. "Will sentiment analysis need subculture? A new data augmentation approach," Journal of the Association for Information Science & Technology, Association for Information Science & Technology, vol. 75(6), pages 655-670, June.
    6. Chi Ma & Jianping Tao & Caifeng Tan & Wei Liu & Xia Li, 2023. "Negative Media Sentiment about the Pig Epidemic and Pork Price Fluctuations: A Study on Spatial Spillover Effect and Mechanism," Agriculture, MDPI, vol. 13(3), pages 1-23, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Call, Andrew C. & Emett, Scott A. & Maksymov, Eldar & Sharp, Nathan Y., 2022. "Meet the press: Survey evidence on financial journalists as information intermediaries," Journal of Accounting and Economics, Elsevier, vol. 73(2).
    2. Goldman, Eitan & Gupta, Nandini & Israelsen, Ryan, 2024. "Political polarization in financial news," Journal of Financial Economics, Elsevier, vol. 155(C).
    3. Rambaccussing, Dooruj & Kwiatkowski, Andrzej, 2020. "Forecasting with news sentiment: Evidence with UK newspapers," International Journal of Forecasting, Elsevier, vol. 36(4), pages 1501-1516.
    4. Minghui Li & Faqin Lan & Fang Zhang, 2019. "Why Chinese Financial Market Investors Do Not Care about Corporate Social Responsibility: Evidence from Mergers and Acquisitions," Sustainability, MDPI, vol. 11(11), pages 1-34, June.
    5. Jacobs, Heiko, 2020. "Hype or help? Journalists’ perceptions of mispriced stocks," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 550-565.
    6. Alomari, Mohammad & Al Rababa’a, Abdel Razzaq & El-Nader, Ghaith & Alkhataybeh, Ahmad & Ur Rehman, Mobeen, 2021. "Examining the effects of news and media sentiments on volatility and correlation: Evidence from the UK," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 280-297.
    7. Liao, Rose & Wang, Xinjie & Wu, Ge, 2021. "The role of media in mergers and acquisitions," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 74(C).
    8. Chi, Yeguang & El-Jahel, Lina & Vu, Thanh, 2024. "Novel and old news sentiment in commodity futures markets," Energy Economics, Elsevier, vol. 140(C).
    9. Laura Xiaolei Liu & Ann E. Sherman & Yong Zhang, 2014. "The Long-Run Role of the Media: Evidence from Initial Public Offerings," Management Science, INFORMS, vol. 60(8), pages 1945-1964, August.
    10. Anastassia Fedyk, 2024. "Front‐Page News: The Effect of News Positioning on Financial Markets," Journal of Finance, American Finance Association, vol. 79(1), pages 5-33, February.
    11. Likittanawong Supawat & Leemakdej Arnat, 2023. "Market Reaction to Corporate Releases and News Articles: Evidence from Thailand’s Stock Market," IJFS, MDPI, vol. 11(3), pages 1-27, September.
    12. Ni Yang & Adrian Fernandez‐Perez & Ivan Indriawan, 2025. "The price impact of tweets: A high‐frequency study," The Financial Review, Eastern Finance Association, vol. 60(1), pages 147-171, February.
    13. Zongwu Cai & Pixiong Chen, 2022. "New Online Investor Sentiment and Asset Returns," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202216, University of Kansas, Department of Economics, revised Nov 2022.
    14. Eierle, Brigitte & Klamer, Sebastian & Muck, Matthias, 2022. "Does it really pay off for investors to consider information from social media?," International Review of Financial Analysis, Elsevier, vol. 81(C).
    15. Jin, Xuejun & Chen, Cheng & Yang, Xiaolan, 2024. "The effect of international media news on the global stock market," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 50-69.
    16. Onur Bayar & Emre Kesici, 2024. "The impact of social media on venture capital financing: evidence from Twitter interactions," Review of Quantitative Finance and Accounting, Springer, vol. 62(1), pages 195-224, January.
    17. Szymon Lis, 2022. "Investor Sentiment in Asset Pricing Models: A Review," Working Papers 2022-14, Faculty of Economic Sciences, University of Warsaw.
    18. Tom Marty & Bruce Vanstone & Tobias Hahn, 2020. "News media analytics in finance: a survey," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(2), pages 1385-1434, June.
    19. Münster, Markus & Reichenbach, Felix & Walther, Martin, 2024. "Robinhood, Reddit, and the news: The impact of traditional and social media on retail investor trading," Journal of Financial Markets, Elsevier, vol. 71(C).
    20. Ruben Durante & Andrea Fabiani & Luc Laeven & José-Luis Peydró, 2021. "Media capture by banks," Economics Working Papers 1817, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 2022.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jinfst:v:72:y:2021:i:9:p:1183-1197. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.asis.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.