Exploring the use of emotional sentiment to understanding market response to unexpected corporate pivots

Iulia Cioroianu, Shaen Corbet, Hou, Yang (Greg), Yang Hu, Charles Larkin and Richard Taffler

Research in International Business and Finance, 2024, vol. 70, issue PA

Abstract: This article studies the influence of social media sentiment on stock prices, focusing on significant shifts by Eastman Kodak. Utilising a unique emotion-based lexicon, the research indicates that social media sentiment immediately reflects stock market responses to major corporate changes. The sentiment techniques used align with the timeline of Kodak’s announcements. Excitement was found to have the greatest impact on Kodak’s prices. However, emotions like anxiety, panic, and revulsion indicated a notable negative social media reaction. The study cautions against the potential volatility in the market when many investors react to the same dubious information. These findings emphasise the significance of adhering to legal and regulatory standards in corporate governance and advocate for transparency and accountability in policy-making for a more reliable financial system.

Keywords: Emotional sentiment; Social media; Stock market; Price response; Price efficiency (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924000977

DOI: 10.1016/j.ribaf.2024.102304

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