IDEAS home Printed from https://ideas.repec.org/a/spr/decisn/v47y2020i4d10.1007_s40622-020-00264-4.html
   My bibliography  Save this article

Emotions in Twitter communication and stock prices of firms: the impact of Covid-19 pandemic

Author

Listed:
  • Suparna Dhar

    (NSHM Knowledge Campus)

  • Indranil Bose

    (Indian Institute of Management Calcutta)

Abstract

In this paper, we explored two key aspects of organization theory—organizational communication in the face of crisis and the influence of emotions expressed in social media communication and their impact on stock prices of firms. We extracted emotional content from 189,303 tweets and collected financial data for six quarters for 105 companies listed on the New York Stock Exchange from the Fortune 1000 list of companies. We operationalized a set of metrics to measure emotion in organizational tweets. Our analysis showed that the operationalized metrics to measure emotion expressed in organizational tweets were significant predictors of stock prices of firms. Further analysis showed a moderation effect of the crisis on the association between emotion expressed in organizational tweets and stock prices in the presence of control variables. The study provides a detailed analysis of constituent positive (happiness) and negative (anger, fear, and sadness) emotions in organizational tweets and their association with stock prices of firms. Practitioners and regulators may use the analysis and the metrics to assess organizational communication and better leverage Twitter for crisis response. This paper showcases organizational crisis response of Twitter and its financial impact.

Suggested Citation

  • Suparna Dhar & Indranil Bose, 2020. "Emotions in Twitter communication and stock prices of firms: the impact of Covid-19 pandemic," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(4), pages 385-399, December.
    • Handle: RePEc:spr:decisn:v:47:y:2020:i:4:d:10.1007_s40622-020-00264-4
    DOI: 10.1007/s40622-020-00264-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40622-020-00264-4
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40622-020-00264-4?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tamara Dinev & Allen R. McConnell & H. Jeff Smith, 2015. "Research Commentary—Informing Privacy Research Through Information Systems, Psychology, and Behavioral Economics: Thinking Outside the “APCO” Box," Information Systems Research, INFORMS, vol. 26(4), pages 639-655, December.
    2. Cynthia Chew & Gunther Eysenbach, 2010. "Pandemics in the Age of Twitter: Content Analysis of Tweets during the 2009 H1N1 Outbreak," PLOS ONE, Public Library of Science, vol. 5(11), pages 1-13, November.
    3. Xueming Luo & Jie Zhang & Wenjing Duan, 2013. "Social Media and Firm Equity Value," Information Systems Research, INFORMS, vol. 24(1), pages 146-163, March.
    4. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    5. Arjen Boin, 2009. "The New World of Crises and Crisis Management: Implications for Policymaking and Research," Review of Policy Research, Policy Studies Organization, vol. 26(4), pages 367-377, July.
    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. Shawn McCarthy & Gita Alaghband, 2023. "Enhancing Financial Market Analysis and Prediction with Emotion Corpora and News Co-Occurrence Network," JRFM, MDPI, vol. 16(4), pages 1-19, April.

    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. Hyoung-Goo Kang & Kyounghun Bae & Jung Ah Shin & Seongmin Jeon, 2021. "Will data on internet queries predict the performance in the marketplace: an empirical study on online searches and IPO stock returns," Electronic Commerce Research, Springer, vol. 21(1), pages 101-124, March.
    2. Daniel E. O'Leary, 2015. "Twitter Mining for Discovery, Prediction and Causality: Applications and Methodologies," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 22(3), pages 227-247, July.
    3. Agarwal, Shweta & Kumar, Shailendra & Goel, Utkarsh, 2019. "Stock market response to information diffusion through internet sources: A literature review," International Journal of Information Management, Elsevier, vol. 45(C), pages 118-131.
    4. David M. Ritzwoller & Joseph P. Romano, 2019. "Uncertainty in the Hot Hand Fallacy: Detecting Streaky Alternatives to Random Bernoulli Sequences," Papers 1908.01406, arXiv.org, revised Apr 2021.
    5. Shazia Ghani, 2011. "A re-visit to Minsky after 2007 financial meltdown," Post-Print halshs-01027435, HAL.
    6. Steininger, Lea & Hesse, Casimir, 2024. "Buying into new ideas: The ECB’s evolving justification of unlimited liquidity," Department of Economics Working Paper Series 357, WU Vienna University of Economics and Business.
    7. Christiane Goodfellow & Dirk Schiereck & Steffen Wippler, 2013. "Are behavioural finance equity funds a superior investment? A note on fund performance and market efficiency," Journal of Asset Management, Palgrave Macmillan, vol. 14(2), pages 111-119, April.
    8. Cagli, Efe Caglar & Taskin, Dilvin & Evrim Mandaci, Pınar, 2019. "The short- and long-run efficiency of energy, precious metals, and base metals markets: Evidence from the exponential smooth transition autoregressive models," Energy Economics, Elsevier, vol. 84(C).
    9. Andrew Weinbach & Rodney J. Paul, 2009. "National television coverage and the behavioural bias of bettors: the American college football totals market," International Gambling Studies, Taylor & Francis Journals, vol. 9(1), pages 55-66, April.
    10. Plantinga, Andrew J. & Provencher, Bill, 2001. "Internal Consistency In Models Of Optimal Resource Use Under Uncertainty," 2001 Annual meeting, August 5-8, Chicago, IL 20712, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Growitsch Christian & Nepal Rabindra & Stronzik Marcus, 2015. "Price Convergence and Information Efficiency in German Natural Gas Markets," German Economic Review, De Gruyter, vol. 16(1), pages 87-103, February.
    12. Oxelheim, Lars & Rafferty, Michael, 2005. "On the static efficiency of secondary bond markets," Journal of Multinational Financial Management, Elsevier, vol. 15(2), pages 117-135, April.
    13. Baoqiang Zhan & Shu Zhang & Helen S. Du & Xiaoguang Yang, 2022. "Exploring Statistical Arbitrage Opportunities Using Machine Learning Strategy," Computational Economics, Springer;Society for Computational Economics, vol. 60(3), pages 861-882, October.
    14. Shi, Huai-Long & Zhou, Wei-Xing, 2022. "Factor volatility spillover and its implications on factor premia," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 80(C).
    15. Gaio, Luiz Eduardo & Stefanelli, Nelson Oliveira & Pimenta, Tabajara & Bonacim, Carlos Alberto Grespan & Gatsios, Rafael Confetti, 2022. "The impact of the Russia-Ukraine conflict on market efficiency: Evidence for the developed stock market," Finance Research Letters, Elsevier, vol. 50(C).
    16. Anastasios Evgenidis & Stephanos Papadamou, 2021. "The impact of unconventional monetary policy in the euro area. Structural and scenario analysis from a Bayesian VAR," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5684-5703, October.
    17. Nuruddeen Usman & Kodili Nwanneka & Nduka, 2023. "Announcement Effect of COVID-19 on Cryptocurrencies," Asian Economics Letters, Asia-Pacific Applied Economics Association, vol. 3(3), pages 1-4.
    18. Tihana Škrinjarić, 2019. "Time Varying Spillovers between the Online Search Volume and Stock Returns: Case of CESEE Markets," IJFS, MDPI, vol. 7(4), pages 1-30, October.
    19. Carol Alexander & Anca Dimitriu, 2003. "Equity Indexing: Conitegration and Stock Price Dispersion: A Regime Switiching Approach to market Efficiency," ICMA Centre Discussion Papers in Finance icma-dp2003-02, Henley Business School, University of Reading.
    20. Robert C. Merton, 2006. "Paul Samuelson and Financial Economics," The American Economist, Sage Publications, vol. 50(2), pages 9-31, October.

    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:spr:decisn:v:47:y:2020:i:4:d:10.1007_s40622-020-00264-4. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.