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Non-Governmental Organization (NGO) Tweets: Do Shareholders Care?

Author

Listed:
  • Marion Dupire

    (IÉSEG School Of Management [Puteaux], LUMEN - Lille University Management Lab - ULR 4999 - Université de Lille)

  • Jean-Yves Filbien

    (Université de Lille, LUMEN - Lille University Management Lab - ULR 4999 - Université de Lille)

  • Bouchra M’zali

    (UQAM - Université du Québec à Montréal = University of Québec in Montréal)

Abstract

We study how messages on Twitter by large non-governmental organizations (NGOs), targeting companies from the S&P500, affect these companies' stock prices. With a sample of 1,611 tweets between 2009 and 2017 by 18 large NGOs, we observe significant changes in the stock prices of the targeted firms. More specifically, NGO tweets stating a positive message about the environmental, social, or governance (ESG). Actions of the firm have a positive effect on stock prices, while negative tweets have a negative effect. Nevertheless, we find that the presence of institutional owners hampers this effect: firms with high institutional ownership value positive tweets more negatively, and negative tweets more positively. These results support the idea that shareholders react significantly to NGO tweets but they react differently depending on their time horizon: for shareholders who have a more short-term horizon, typically institutional owners, the reaction diverges societal expectations about how firms should contribute to society.

Suggested Citation

  • Marion Dupire & Jean-Yves Filbien & Bouchra M’zali, 2021. "Non-Governmental Organization (NGO) Tweets: Do Shareholders Care?," Post-Print hal-04409565, HAL.
    • Handle: RePEc:hal:journl:hal-04409565
    DOI: 10.1177/0007650320985204
    as

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