 The effect of SEC approval of social media for information disseminationJack W. Dorminey, Richard B. Dull and Ludwig Christian Schaupp Research in Accounting Regulation, 2015, vol. 27, issue 2, 165-173 Abstract: In April 2013, the SEC provided explicit guidance to public companies regarding social media use for material disclosures. This paper examines the effect of regulatory approval on the market reaction to financial disclosures distributed by firms via social media. The use of social media to disseminate information may lead to broader market interest in the stock. Social media use by firms is explored in three time periods: (1) prior to public SEC scrutiny of social media, (2) after the SEC filed a formal complaint about the use of social media, and (3) after the April 2013 guidance. The analysis demonstrates a positive association between social media use and market reaction as evidenced in trading volume. Second, the association between social media use by firms and trading volume is greatest following the SEC's guidance. Third, social media are used more extensively by disclosing firms in the period following explicit SEC guidance permitting its use. Keywords: Regulation FD; Securities and Exchange Commission; Social media; Trading volume (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reacre:v:27:y:2015:i:2:p:165-173 DOI: 10.1016/j.racreg.2015.09.007 Access Statistics for this article Research in Accounting Regulation is currently edited by G. Previts More articles in Research in Accounting Regulation from Elsevier |
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