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Social Media and Corruption

Author

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  • Enikolopov, Ruben
  • Petrova, Maria
  • Sonin, Konstantin

Abstract

There is ample evidence that in democratic countries traditional mass media affect people’s behavior and foster political and corporate accountability. Do new media such as blogs play a similar role in non-democratic countries, where offline media are often suppressed? We study consequences of blog posts about corruption in Russian state-controlled companies. We show that anti-corruption blog posts by Aleksei Navalny, a popular Russian civic activist, had a negative causal impact on market returns of state-controlled companies. For identification, we exploit the analysis of the precise timing of blog posts combined with quasi-random variation in access to blog platform caused by hacker attacks. The effect becomes less pronounced and even positive for the posts that attract the most attention, consistent with disciplining effect of social media. Furthermore, the posts have a long-term impact on returns and are 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 mass media.

Suggested Citation

  • Enikolopov, Ruben & Petrova, Maria & Sonin, Konstantin, 2016. "Social Media and Corruption," CEPR Discussion Papers 11263, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11263
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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. 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.
    5. Günther G. Schulze & Nikita Zakharov, 2018. "Corruption in Russia - Historic Legacy and Systemic Nature," CESifo Working Paper Series 6864, CESifo Group Munich.
    6. repec:ris:apltrx:0344 is not listed on IDEAS
    7. Chandan K. Jha & Oasis Kodila-Tedika, 2019. "Does Social Media Promote Democracy? Some Empirical Evidence," Working Papers of the African Governance and Development Institute. 19/031, African Governance and Development Institute..
    8. repec:eee:jeeman:v:91:y:2018:i:c:p:184-202 is not listed on IDEAS

    More about this item

    Keywords

    financial markets; governance; political economy; social media;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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