Does twitter sentiment induce or reduce earnings management?

Danlin Zhu and Lin Yu

Finance Research Letters, 2025, vol. 81, issue C

Abstract: This study examines the impact of Twitter platform sentiment on corporate earnings management based on a sample of S&P 500 firms from 2017 to 2023. Our findings show that high investor sentiment is associated with increased abnormal accruals, especially income-increasing accrual adjustments, though the positive sentiment effect diminishes over time. The COVID-19 pandemic moderates this relationship, especially at firms with positive sentiment. Our study contributes to understanding the impact of social media on earnings management and suggests avenues for further research on sentiment analysis across platforms.

Keywords: Earnings management; Investor sentiment; Social media; Twitter (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007068

DOI: 10.1016/j.frl.2025.107452

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