Measuring the effect of investor sentiment on liquidity

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lee M. Dunham ◽  
John Garcia
Keyword(s):  
Social Media ◽  
Investment Decision ◽  
Investor Sentiment ◽  
Firm Level ◽  
Content Type ◽  
Bid Ask Spread ◽  
Investment Decision Making ◽  
Use Of Social Media ◽  
News Sentiment ◽  
The Relationship

PurposeThe purpose of this paper is to examine the effect of firm-level investor sentiment on a firm's share liquidity.Design/methodology/approachThe authors use Bloomberg's firm-level, daily investor sentiment scores derived from firm-level news and Twitter content in a regression model to explain the variability in a firm's share liquidity.FindingsThe results indicate that improvements (deterioration) in investor sentiment derived solely from Twitter content lead to a decrease (increase) in the average firm's share liquidity. Results, although not as strong, are opposite for investor sentiment derived solely from news articles: improvements (deterioration) in news sentiment leads to an increase (decrease) in the average firm's share liquidity.Research limitations/implicationsThe proxy for share liquidity is the bid-ask spread, which may be an imperfect measure of liquidity. The Amihud illiquidity measure was used as an alternative proxy and yield similar results. The results have important implications for investors in assessing the determinants of share liquidity.Practical implicationsThe sample period covers four years (2015–2018), which is determined by the availability of the Bloomberg sentiment data.Social implicationsInvestors increasing use of social media to express views on particular stocks and seek information that might be used in the investment decision-making process. The study links investor sentiment derived from social media (Twitter) to share liquidity.Originality/valueBy examining the relationship between a firm's sentiment and the firm's share liquidity, this paper advances the authors' understanding of the factors that drive a firm's share liquidity. To the authors' knowledge, this is the first study to link investor sentiment derived from firm-level news and Twitter content to a firm's share liquidity.

Measuring the effect of investor sentiment on financial distress

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lee M. Dunham ◽  
John Garcia
Keyword(s):  
Social Media ◽  
Financial Distress ◽  
Investor Sentiment ◽  
Data Availability ◽  
Firm Level ◽  
Content Type ◽  
Market Participants ◽  
Distress Level ◽  
The Relationship ◽  
Practical Implications

PurposeThis study examines the effect of firm-level investor sentiment on a firm's level of financial distress.Design/methodology/approachThe authors use Bloomberg's firm-level, daily investor sentiment scores derived from firm-level news and Twitter content in a beta-regression model to explain the variability in a firm's financial distress.FindingsThe results indicate that improvements (deterioration) in investor sentiment derived from both news articles and Twitter content lead to a decrease (increase) in the average firm's financial distress level. We also find that the effect of sentiment derived from Twitter on a firm's financial distress is significantly stronger than the sentiment derived from news articles.Research limitations/implicationsOur proxy for financial distress is Bloomberg's financial distress measures, which may be an imperfect measure of financial distress. Our results have important implications for market participants in assessing the determinants of financial distress.Practical implicationsOur sample period covers four years (2015–2019), which is determined by Bloomberg sentiment data availability.Social implicationsMarket participants are increasingly using social media to express views on firms and seek information that might be used to determine a firm's level of financial distress. Our study links investor sentiment derived from social media (Twitter) and traditional news articles to financial distress.Originality/valueBy examining the relationship between a firm's sentiment and its financial distress, this paper advances our understanding of the factors that drive a firm's financial distress. To our knowledge, this is the first study to link US firms' investor sentiment derived from firm-level news and Twitter content to a firm's financial distress.

Relationships between research supervisors and students from coursework-based master’s degrees: information usage under social media

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Gunnan Dong ◽  
Dickson K.W. Chiu ◽  
Po-Sen Huang ◽  
Kevin K.W. Ho ◽  
Mavis Man-wai Lung ◽  
...  
Keyword(s):  
Social Media ◽  
Graduate Students ◽  
Media Environment ◽  
Content Type ◽  
Master's Degrees ◽  
Information Usage ◽  
Use Of Social Media ◽  
Research Students ◽  
Teaching Learning ◽  
The Relationship

Purpose Existing studies reflect that traditional teaching–learning relationships between supervisors and graduate students have become disjointed with actuality seriously. In particular, there are practical difficulties in handling many students from coursework-based postgraduate degrees under current university curricula. Therefore, this study aims to explore the relationship between research supervisors and graduate students on social media, which is popular among students. Design/methodology/approach This study surveyed 109 graduate students from two majors (population around 100 each) of a university in Hong Kong to explore their information usage for research on social media, related attitudes and their perceived supervisor relationships. The differences between the two majors were also compared. Findings The authors’ findings indicated that graduate students were active on social media, and social media has successfully provided effective alternate ways for students to communicate with their research supervisors. Social media could improve relationships between supervisors and research students and among fellow students. Besides education purposes, students also discussed their personal affairs on social media with supervisors, demonstrating enhanced trusted relationships. Graduate students also showed confidence in the further application of social media in higher education. Some differences between respondents from the two programs were also found in terms of communication contents, strengths, personal preferences and purposes for using social media. Originality/value Scant studies focus on the relationship between supervisors and graduate students under the current social media environment, especially for students from coursework-based postgraduate degrees. At a deeper level, for the widespread use of social media in the information age, this study explores the specific changes brought about by social media. Therefore, this study is of great theoretical and practical value to graduate education under the current social media environment.

Investor sentiment antecedents

2019 ◽  
Vol 11 (1) ◽  
pp. 36-54 ◽  
Author(s):  
Ranjan Dasgupta ◽  
Rashmi Singh
Keyword(s):  
Decision Making ◽  
Stock Market ◽  
Emerging Market ◽  
Investment Decision ◽  
Investor Sentiment ◽  
Equation Modeling ◽  
Content Type ◽  
Investment Decision Making ◽  
Retail Investors ◽  
Specific Factors

PurposeThe determinants of investor sentiment based on stock market proxies are found in numbers in empirical studies. However, investor sentiment antecedents developed from primary survey measures by constructing an investor sentiment index (ISI) are not done till date. The purpose of this paper is to fill this research gap by first developing an ISI for the Indian retail investors and then examining the investor-specific, stock market-specific, macroeconomic and policy-specific factors’ individual impact on the investor sentiment.Design/methodology/approachFirst, the authors develop the ISI by using the mean scores of six statements as formulated based on popular direct investor sentiment surveys undertaken throughout the world. Then, the authors employ the structural equation modeling approach on the responses of 576 respondents on 40 statements (representing the index and four study hypotheses) collected in 2016 across the country.FindingsThe results show that investor- and stock market-specific factors are the major antecedents of investor sentiment for these investors. However, interestingly macroeconomic fundamentals and policy-specific factors have no role to play in driving their sentiment to invest in the stock market.Practical implicationsThe major implication of the results is that the Indian retail investors are showing a mixed approach of Bayesian and behavioral finance decision making. So, these implications can guide the investment consultants, regulators, other stakeholders in markets and overwhelmingly the retail investors to introspect their investment decision making across time horizons.Originality/valueThe formulation of ISI in an emerging market context and thereafter examining possible antecedents to influence retail investors in their investment decision making are not done till date. So, the study is unique in its research issue and findings and will have significant implication for the retail investors at least in emerging market contexts.

Social media influence on the B2B buying process

2019 ◽  
Vol 34 (7) ◽  
pp. 1482-1496 ◽  
Author(s):  
Hoda Diba ◽  
Joseph M. Vella ◽  
Russell Abratt
Keyword(s):  
Social Media ◽  
Design Methodology ◽  
Media Influence ◽  
Content Type ◽  
Exploratory Approach ◽  
Functional Blocks ◽  
Use Of Social Media ◽  
The Relationship ◽  
Business To Business ◽  
Practical Implications

Purpose This study aims to explore if and how business-to-business (B2B) companies can use social media to influence the buying process. Design/methodology/approach The study uses an exploratory approach into the existing literature related to the B2B buying process and its relationship with social media. Findings The study shows that companies in a B2B context can use social media as a means of influencing the stages of the buying process by means of using one or more of the seven functional blocks of social media. Research limitations/implications The findings demonstrate the relation that exists between each stage of the buyer process in a B2B organization and the functional blocks of social media. This study opens the door for further research into the influence of each of these blocks on the buying process stages and the roles involved. Practical implications This study identifies how social media’s blocks influence the different stages and how organizations can use that to their benefit. Originality/value Few studies have investigated the use of social media in a B2B context. However, not many have looked into the influence of social media in the B2B buying process and buying center. This study looks into the relationship between the buying process stages and social media’s functional blocks as related to the different roles of the buying center.

scholarly journals The Effects of Irreversibility and Uncertainty on Business Investments: A New View of Investment

2014 ◽  
Vol 5 (3) ◽  
pp. 7-20
Author(s):  
Katarína Belanová
Keyword(s):  
Empirical Analysis ◽  
Investment Decision ◽  
Firm Level ◽  
Factors Affecting ◽  
Real Options Approach ◽  
Investment Decision Making ◽  
Level Data ◽  
The Impact ◽  
The Relationship ◽  
The Empirical Analysis

This article presents a survey of recent theoretical, as well as empirical, contributions concerning business investments, which help to explain the investment decision making of companies. These contributions emphasize the relevance of idiosyncratic factors affecting investment decisions such as the degree of irreversibility and uncertainty, interactions between these factors may generate an opportunity cost equivalent to the exercise of an option and so they add an important dimension to the neoclassical theory of investment (also called standard or orthodox theory of investment). This theory has not recognized the important qualitative and quantitative implications of this interaction, what can explain some of its failures. We investigate the irreversibility of investments and the impact this has on the nature of the relationship between investment and uncertainty in the way of empirical analysis. The empirical analysis uses firm – level data and is based on a survey of 53 automotive suppliers, which was carried out during the year 2011. We find supportive evidence for the fact that uncertainty is negatively associated with planned investments of the companies surveyed, which remains true also in the presence of irreversibility. At the end we demonstrate the core of the real options approach in a form of a practical example.

Social media adoption and business performance: the mediating role of organizational learning capability (OLC)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Luqman Oyekunle Oyewobi ◽  
Olatunde Folaranmi Adedayo ◽  
Seth Olufemi Olorunyomi ◽  
Richard Jimoh
Keyword(s):  
Social Media ◽  
Business Performance ◽  
Learning Capability ◽  
Content Type ◽  
Learning Capacity ◽  
Mediating Role ◽  
And Performance ◽  
Use Of Social Media ◽  
The Relationship

Purpose The purpose of this paper is to explore the mediating effect of learning capacity in the relationship between the social media usage by the construction of small- and medium-sized enterprises (SMEs) and their business performance in Nigeria. Design/methodology/approach A quantitative survey technique was used to collect data from the owner/manager of construction SMEs in Nigeria. The partial least square structural equation modeling was used in the assessment of the measurement model and structural model to assess the validity and reliability of the measures and to evaluate the hypotheses proposed in the conceptual model. Findings Empirical findings indicated a significant positive relationship between learning capacity and performance of SMEs. Similarly, the use of social media is significantly and positively associated to the business performance of SMEs. It has also been shown that learning capacity is a mediator of the relationship between social media and SME performance. Research limitations/implications The data for the study is are all from a single industry and a related line of business, so it could be more interesting to include more companies across sectors or industries. The finding contributes to the ongoing debate on the effect of social media on business performance. It also defined the need for the owner/manager of SMEs to understand and appreciate the effect of social media through the organization's learning potential to gain a sustainable competitive advantage. Practical implications There are a number of theoretical and practical implications for academics and practitioners who are interested in further studies of organizational social media. The research presents a quantitative study on the effect of social media adoption on the organizational performance of the construction industry. This study confirms the mediating role of learning capability in the relationship between the use of social media and performance of SMEs operating in the construction industry. Originality/value This study empirically examined the relationship between social media adoption and the SMEs learning capability and business performance by evaluating a hypothesized conceptual framework to establish the relationships.

Impact of investor sentiment on decision-making in Indian stock market: an empirical analysis

2019 ◽  
Vol 17 (1) ◽  
pp. 66-83 ◽  
Author(s):  
Haritha P.H. ◽  
Rashmi Uchil
Keyword(s):  
Decision Making ◽  
Social Interaction ◽  
Investment Decision ◽  
Investor Sentiment ◽  
Individual Investors ◽  
Content Type ◽  
Market Effect ◽  
Factors Influencing ◽  
The Individual ◽  
The Relationship

Purpose The purpose of this paper is to analyze the relationship between the factors influencing investors sentiment and investment decision-making (DM) of the individual investors. This paper proposes a unique conceptual framework that incorporates the herding, market and awareness factors that are leading to investor sentiment (IS) and decision-making process of the individual investors. Design/methodology/approach This study has conducted a questionnaire-based survey to collect data from 875 individual investors through the convenience sampling method. Structural equation modeling was used to evaluate the relationship between factors, namely, market effect, herd behavior, media, social interaction and advocate recommendation that influences IS and DM. Findings The present study found that market effect and herding are the most significantly influencing factors of investors sentiment. Among the sources of awareness, the internet has the lowest influence when compared to media, social interaction and advocate recommendation. Practical implications This study will help individual investors to avoid the problems faced while making an investment decision. The study could help investors to select a suitable investment aid and avoid repeating expensive errors, which arise due to investors’ sentiment. It is recommended to increase the awareness regarding investors’ sentiment among individuals, so as to increase their understanding about the financial settings and to make them confident while investing. The present study also sheds light upon the behavior of Indian individual investors so that policymakers can take appropriate measures to provide the proper guidance. Policymakers can conduct awareness campaigns to increase investors’ knowledge on the market condition and to enhance proper investment DM among them. Originality/value To best of the authors’ knowledge, previous studies have focused on limited factors at a time. The present study has investigated how factors influencing investors sentiment, namely, market factors (MF), herding as well as awareness would influence investment DM among individual investors in India. The influence of these factors has never been studied simultaneously in the context of Indian individual investors’ DM.

Does Social Media Increase Labour Productivity?

2017 ◽  
Vol 237 (2) ◽  
pp. 81-113 ◽  
Author(s):  
Miruna Sarbu
Keyword(s):  
Social Media ◽  
Customer Relationship Management ◽  
Labour Productivity ◽  
Customer Relationship ◽  
Service Firms ◽  
Firm Level ◽  
Level Data ◽  
Use Of Social Media ◽  
Media Applications ◽  
The Relationship

Abstract: Social media applications such as wikis, blogs or social networks are being increasingly applied in firms. These applications can be used for external communication and internal knowledge management. Firms can potentially increase their productivity by optimising customer relationship management, marketing, market research and project management. On the other hand, the use of social media might lead to shirking among employees and might be, in general, very time-consuming preventing employees from managing their normal workload. This might lead to a decrease of labour productivity. This paper analyses the relationship between social media applications and labour productivity using firm-level data of 907 German manufacturing and service firms. The analysis is based on a Cobb-Douglas production function. The results reveal that social media might be related to labour productivity in an negative way which points towards a suboptimal use of social media.

scholarly journals The relationship between online campaigning and political involvement

2016 ◽  
Vol 40 (5) ◽  
pp. 673-694 ◽  
Author(s):  
Sanne Kruikemeier ◽  
Guda van Noort ◽  
Rens Vliegenthart ◽  
Claes H. de Vreese
Keyword(s):  
Social Media ◽  
Social Presence ◽  
Political Involvement ◽  
Interactive Communication ◽  
Content Type ◽  
Political Consequences ◽  
Source Expertise ◽  
Online Campaigning ◽  
Use Of Social Media ◽  
The Relationship

Purpose The purpose of this paper is to examine the causal relationship between interactive and personal campaigning on social media and political involvement, and the mechanisms that explain the effects. Specifically, this study examines whether personal and interactive communication on Twitter increases political involvement among citizens through social presence and perceived expertise. Design/methodology/approach An experimental design – a 2 (low vs high interactivity)×3 (depersonalized vs individualized vs privatized communication) between-subjects design – is used. Findings The findings show that interactive communication leads to a stronger sense of social presence and source expertise, which positively affect involvement. The effects of personal campaigning differ. Individualized communication positively affects involvement via source expertise. Interestingly, privatized communication positively affects involvement via social presence, but negatively via source expertise. Originality/value Although a growing body of work examines the political consequences of social media, there is still very little understanding why social media affect citizens. The current study fills this void by investigating how the use of social media affects political involvement among citizens.

Influence of investor sentiment and its antecedent on investment decision-making using partial least square technique

2020 ◽  
Vol 43 (11) ◽  
pp. 1441-1459
Author(s):  
Haritha P.H. ◽  
Rashmi Uchil
Keyword(s):  
Decision Making ◽  
Social Interaction ◽  
Stock Market ◽  
Investment Decision ◽  
Investor Sentiment ◽  
Partial Least Square ◽  
Individual Investors ◽  
Content Type ◽  
Investment Decision Making ◽  
The Impact

Purpose The purpose of this paper is to determine whether individual investor sentiment and its factors influence investment decision-making behavior in the Indian stock market. The study contributes to the novel conceptual framework that integrates the impact of investor sentiment and outlines the role of its factors (herding, media factor, advocate recommendation and social interaction) during the investment decision-making process. Design/methodology/approach In this paper, data were collected using a structured questionnaire survey from Indian individual investors. It uses self-reported sources of information collected via a survey of individual investors and estimated the linkage via path modeling. The collected data were analyzed using partial least square structural equation modeling to examine the relationship between the construct, namely, herding, media, advocate recommendation and social interaction with investor sentiment and investment decision-making. Findings The study shows that herding, media factor, advocate recommendation and social interaction significantly and positively influence the investor sentiment. Among all the factors, social interaction has the lowest influence on investor sentiment. The study also reveals that investor sentiment has a positive impact on investment decision-making. Practical implications The study provides valuable insights for the individual investors, financial advisors, policymakers and other stakeholders. Knowledge of behavioral finance would enhance the decision-making capabilities of individual investors in the stock market. Thus, the study calls for the need to increase awareness among Indian investors about behavioral finance and its usefulness in investment decision-making. The paper also sheds light upon the influence of investor sentiment and its antecedents on investment decision-making. The study confirms that the investor relies on their sentiment while making investment decisions. Hence, the stakeholders in the stock market should focus on investor sentiment and other psychological aspects of individual investors as well. Originality/value There are very few studies that deal with the behavioral aspects of individual investors in an emerging market context. The study mainly focuses on the antecedent of investor sentiment and its influence on investment decision-making in the Indian stock market. To the best of authors’ knowledge, the present study unique nature that examines the impact of the antecedent of investor sentiment which was not explored in the Indian context and investment decision-making of individual investors.

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