IDEAS home Printed from https://ideas.repec.org/a/rmk/rmkbae/v10y2023i2p47-66.html
   My bibliography  Save this article

Twitter‘s happiness sentiment index impacts on financial markets: an integrated overview of empirical findings

Author

Listed:
  • ?ikolaos A. Kyriazis

Abstract

This survey paper investigates the empirical findings of academic work that explores the nexus between the highly innovative Twitter happiness sentiment index and a range of financial assets. An integrated overview of econometric outcomes and the relevant investment policy implications are provided. It is revealed that investor happiness reinforces the safe haven abilities of gold. Moreover, major stock indices are highly influenced by the happiness index especially at higher quantiles. Reverse causality between the happiness index and stock indices is also detected but in a weaker level. This survey contributes to better understanding investment decisions based on behavioural finance and provides evidence about the nexus of investor sentiment estimation with the financial sector nowadays.

Suggested Citation

  • ?ikolaos A. Kyriazis, 2023. "Twitter‘s happiness sentiment index impacts on financial markets: an integrated overview of empirical findings," Bulletin of Applied Economics, Risk Market Journals, vol. 10(2), pages 47-66.
    • Handle: RePEc:rmk:rmkbae:v:10:y:2023:i:2:p:47-66
    as

    Download full text from publisher

    File URL: https://www.riskmarket.co.uk/bae/journals-articles/issues/twitters-happiness-sentiment-index-impacts-on-financial-markets-an-integrated-overview-of-empirical-findings/?download=attachment.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Koenker, Roger & Machado, Jose A. F., 1999. "GMM inference when the number of moment conditions is large," Journal of Econometrics, Elsevier, vol. 93(2), pages 327-344, December.
    2. Bonato, Matteo & Gkillas, Konstantinos & Gupta, Rangan & Pierdzioch, Christian, 2021. "A note on investor happiness and the predictability of realized volatility of gold," Finance Research Letters, Elsevier, vol. 39(C).
    3. Matthew Hood & Farooq Malik, 2013. "Is gold the best hedge and a safe haven under changing stock market volatility?," Review of Financial Economics, John Wiley & Sons, vol. 22(2), pages 47-52, April.
    4. Barberis, Nicholas & Thaler, Richard, 2003. "A survey of behavioral finance," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 18, pages 1053-1128, Elsevier.
    5. Wen, Xiaoqian & Cheng, Hua, 2018. "Which is the safe haven for emerging stock markets, gold or the US dollar?," Emerging Markets Review, Elsevier, vol. 35(C), pages 69-90.
    6. Wei-Fong Pan, 2020. "Does Investor Sentiment Drive Stock Market Bubbles? Beware of Excessive Optimism!," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 21(1), pages 27-41, January.
    7. Huang, Bwo-Nung & Hwang, M.J. & Yang, C.W., 2008. "Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach," Ecological Economics, Elsevier, vol. 67(1), pages 41-54, August.
    8. Fulvio Corsi, 2009. "A Simple Approximate Long-Memory Model of Realized Volatility," Journal of Financial Econometrics, Oxford University Press, vol. 7(2), pages 174-196, Spring.
    9. You, Wanhai & Guo, Yawei & Peng, Cheng, 2017. "Twitter's daily happiness sentiment and the predictability of stock returns," Finance Research Letters, Elsevier, vol. 23(C), pages 58-64.
    10. Nikolaos A. Kyriazis, 2019. "A Survey on Empirical Findings about Spillovers in Cryptocurrency Markets," JRFM, MDPI, vol. 12(4), pages 1-17, November.
    11. Diks, Cees & Panchenko, Valentyn, 2006. "A new statistic and practical guidelines for nonparametric Granger causality testing," Journal of Economic Dynamics and Control, Elsevier, vol. 30(9-10), pages 1647-1669.
    12. Lee, Chien-Chiang & Chen, Mei-Ping, 2020. "Happiness sentiments and the prediction of cross-border country exchange-traded fund returns," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    13. Beckmann, Joscha & Berger, Theo & Czudaj, Robert, 2015. "Does gold act as a hedge or a safe haven for stocks? A smooth transition approach," Economic Modelling, Elsevier, vol. 48(C), pages 16-24.
    14. Papadamou, Stephanos & Kyriazis, Νikolaos A. & Tzeremes, Panayiotis G., 2019. "Unconventional monetary policy effects on output and inflation: A meta-analysis," International Review of Financial Analysis, Elsevier, vol. 61(C), pages 295-305.
    15. Robert J. Shiller, 2003. "From Efficient Markets Theory to Behavioral Finance," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 83-104, Winter.
    16. Stephanos Papadamou & Costas Siriopoulos & Nikolaos A. Kyriazis, 2020. "A survey of empirical findings on unconventional central bank policies," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(7), pages 1533-1577, April.
    17. Nikolaos A. Kyriazis, 2021. "Trade Policy Uncertainty Effects on Macro Economy and Financial Markets: An Integrated Survey and Empirical Investigation," JRFM, MDPI, vol. 14(1), pages 1-20, January.
    18. Naeem, Muhammad Abubakr & Farid, Saqib & Faruk, Balli & Shahzad, Syed Jawad Hussain, 2020. "Can happiness predict future volatility in stock markets?," Research in International Business and Finance, Elsevier, vol. 54(C).
    19. Richard H. Thaler, 1999. "The End of Behavioral Finance," Financial Analysts Journal, Taylor & Francis Journals, vol. 55(6), pages 12-17, November.
    20. Hood, Matthew & Malik, Farooq, 2013. "Is gold the best hedge and a safe haven under changing stock market volatility?," Review of Financial Economics, Elsevier, vol. 22(2), pages 47-52.
    21. Corbet, Shaen & Lucey, Brian & Urquhart, Andrew & Yarovaya, Larisa, 2019. "Cryptocurrencies as a financial asset: A systematic analysis," International Review of Financial Analysis, Elsevier, vol. 62(C), pages 182-199.
    22. Νikolaos A. Kyriazis, 2021. "The effects of geopolitical uncertainty on cryptocurrencies and other financial assets," SN Business & Economics, Springer, vol. 1(1), pages 1-14, January.
    23. Brown, Gregory W. & Cliff, Michael T., 2004. "Investor sentiment and the near-term stock market," Journal of Empirical Finance, Elsevier, vol. 11(1), pages 1-27, January.
    24. 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.
    25. Li, Xiao & Shen, Dehua & Xue, Mei & Zhang, Wei, 2017. "Daily happiness and stock returns: The case of Chinese company listed in the United States," Economic Modelling, Elsevier, vol. 64(C), pages 496-501.
    26. Nikolaos A. Kyriazis, 2019. "A Survey on Efficiency and Profitable Trading Opportunities in Cryptocurrency Markets," JRFM, MDPI, vol. 12(2), pages 1-17, April.
    27. Stracca, Livio, 2004. "Behavioral finance and asset prices: Where do we stand?," Journal of Economic Psychology, Elsevier, vol. 25(3), pages 373-405, June.
    28. Nikolaos A. Kyriazis, 2021. "The Nexus of Sophisticated Digital Assets with Economic Policy Uncertainty: A Survey of Empirical Findings and an Empirical Investigation," Sustainability, MDPI, vol. 13(10), pages 1-25, May.
    29. Dutta, Anupam & Das, Debojyoti & Jana, R.K. & Vo, Xuan Vinh, 2020. "COVID-19 and oil market crash: Revisiting the safe haven property of gold and Bitcoin," Resources Policy, Elsevier, vol. 69(C).
    Full references (including those not matched with items on IDEAS)

    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. Văn, Lê & Bảo, Nguyễn Khắc Quốc, 2022. "The relationship between global stock and precious metals under Covid-19 and happiness perspectives," Resources Policy, Elsevier, vol. 77(C).
    2. Nikolaos A. Kyriazis, 2021. "The Nexus of Sophisticated Digital Assets with Economic Policy Uncertainty: A Survey of Empirical Findings and an Empirical Investigation," Sustainability, MDPI, vol. 13(10), pages 1-25, May.
    3. Mighri, Zouheir & Ragoubi, Hanen & Sarwar, Suleman & Wang, Yihan, 2022. "Quantile Granger causality between US stock market indices and precious metal prices," Resources Policy, Elsevier, vol. 76(C).
    4. Talbi, Marwa & Bedoui, Rihab & de Peretti, Christian & Belkacem, Lotfi, 2021. "Is the role of precious metals as precious as they are? A vine copula and BiVaR approaches," Resources Policy, Elsevier, vol. 73(C).
    5. Bouri, Elie & Jalkh, Naji, 2024. "Flight-to-safety across time and market conditions," International Review of Economics & Finance, Elsevier, vol. 94(C).
    6. Naeem, Muhammad Abubakr & Farid, Saqib & Faruk, Balli & Shahzad, Syed Jawad Hussain, 2020. "Can happiness predict future volatility in stock markets?," Research in International Business and Finance, Elsevier, vol. 54(C).
    7. Roberto Arturo Agudelo Aguirre & Alberto Antonio Agudelo Aguirre, 2024. "Behavioral finance: Evolution from the classical theory and remarks," Journal of Economic Surveys, Wiley Blackwell, vol. 38(2), pages 452-475, April.
    8. Zhang, Wei & Wang, Pengfei & Li, Xiao & Shen, Dehua, 2018. "Twitter’s daily happiness sentiment and international stock returns: Evidence from linear and nonlinear causality tests," Journal of Behavioral and Experimental Finance, Elsevier, vol. 18(C), pages 50-53.
    9. Chen, Wen-Yi & Chen, Mei-Ping, 2022. "Twitter’s daily happiness sentiment, economic policy uncertainty, and stock index fluctuations," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    10. Rizvi, Syed Kumail Abbas & Naqvi, Bushra & Mirza, Nawazish & Umar, Muhammad, 2022. "Safe haven properties of green, Islamic, and crypto assets and investor's proclivity towards treasury and gold," Energy Economics, Elsevier, vol. 115(C).
    11. Zhu, Xuehong & Niu, Zibo & Zhang, Hongwei & Huang, Jiaxin & Zuo, Xuguang, 2022. "Can gold and bitcoin hedge against the COVID-19 related news sentiment risk? New evidence from a NARDL approach," Resources Policy, Elsevier, vol. 79(C).
    12. Naeem, Muhammad Abubakr & Mbarki, Imen & Shahzad, Syed Jawad Hussain, 2021. "Predictive role of online investor sentiment for cryptocurrency market: Evidence from happiness and fears," International Review of Economics & Finance, Elsevier, vol. 73(C), pages 496-514.
    13. Janani Sri S. & Parthajit Kayal & G. Balasubramanian, 2022. "Can Equity be Safe-haven for Investment?," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 21(1), pages 32-63, March.
    14. Chung Baek & Thomas Jackman, 2021. "Safe-haven assets for U.S. equities during the 2020 COVID-19 bear market," Economics and Business Letters, Oviedo University Press, vol. 10(3), pages 331-335.
    15. Abdulsalam Abidemi Sikiru & Afees A. Salisu, 2023. "Hedging against risks associated with travel and tourism stocks during COVID‐19 pandemic: The role of gold," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1872-1882, April.
    16. Cui, Moyang & Wong, Wing-Keung & Wisetsri, Worakamol & Mabrouk, Fatma & Muda, Iskandar & Li, Zeyun & Hassan, Marria, 2023. "Do oil, gold and metallic price volatilities prove gold as a safe haven during COVID-19 pandemic? Novel evidence from COVID-19 data," Resources Policy, Elsevier, vol. 80(C).
    17. Seok, Sangik & Cho, Hoon & Ryu, Doojin, 2024. "Dual effects of investor sentiment and uncertainty in financial markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 95(C), pages 300-315.
    18. Tiwari, Aviral Kumar & Abakah, Emmanuel Joel Aikins & Karikari, Nana Kwasi & Hammoudeh, Shawkat, 2022. "Time-varying dependence dynamics between international commodity prices and Australian industry stock returns: a Perspective for portfolio diversification," Energy Economics, Elsevier, vol. 108(C).
    19. Gustafsson, Robert & Dutta, Anupam & Bouri, Elie, 2022. "Are energy metals hedges or safe havens for clean energy stock returns?," Energy, Elsevier, vol. 244(PA).
    20. Hassan, M. Kabir & Kamran, Muhammad & Djajadikerta, Hadrian Geri & Choudhury, Tonmoy, 2022. "Search for safe havens and resilience to global financial volatility: Response of GCC equity indexes to GFC and Covid-19," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).

    More about this item

    Keywords

    Investor happiness; Investor sentiment; Twitter; Survey; Gold; Stock prices.;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

    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:rmk:rmkbae:v:10:y:2023:i:2:p:47-66. 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: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.riskmarket.co.uk/ .

    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.