Reaching the public with Twitter: The reputation value of CEOs

Yao Du, Tran Thi Thuy Linh, Chien-Lin Lu and Hong Thoa Nguyen

International Review of Economics & Finance, 2024, vol. 94, issue C

Abstract: In this study, we investigate whether CEOs' use of Twitter influences their compensation. The results show that CEOs benefit from being active on social media because this participation helps reduce information asymmetry. Further, the effect of this Twitter usage becomes stronger when firms face competitive markets. We also use earnings announcements to show how CEOs' tweets can lower the deviations in stock prices around these announcements. Overall, a CEO's personal use of social media can help to reduce the information asymmetry between their firm and investors. This strategic tool benefits the CEO when negotiating compensation.

Keywords: CEO Twitter; Compensation; Abnormal return; Information asymmetry; Earnings announcements (search for similar items in EconPapers)
JEL-codes: G32 G41 M12 M51 M52 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:94:y:2024:i:c:s1059056024003411

DOI: 10.1016/j.iref.2024.05.043

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