Social media, investor‒firm interactions and informational efficiency of stock prices: Evidence from China

Jinhan Shu

Finance Research Letters, 2024, vol. 69, issue PA

Abstract: Using a sample of Chinese listed companies from 2010 to 2022, we examine how investor‒firm online interactions influence informational efficiency of stock prices. The empirical results indicate that investor–firm online interactions significantly enhance informational efficiency. After conducting a series of robustness checks, the conclusions remain valid. Mechanistic analysis demonstrates that investor–firm online interactions enhance informational efficiency primarily by reducing information asymmetry and correcting stock mispricing. We emphasize the critical importance of retail investor–firm online interactions within social media platforms in promoting informational efficiency of stock prices.

Keywords: Investor–firm interactions; Informational efficiency; Information asymmetry; Stock mispricing (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324010894

DOI: 10.1016/j.frl.2024.106059

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