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The neglected cohort: The impact of silent majority in social media on stock returns

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  • Long, Wen
  • Zhong, Yanqiang

Abstract

Prior studies have mostly analyzed users of social media as a whole, however, different user cohorts have various behavior characteristics and may have different effects. We divide users in social media into silent majority and vocal minority based on their posting behavior. Our results show that the investor sentiment of silent majority has a greater impact on stock returns than that of vocal minority and all users. In addition, we also explore the mechanism that generates differences in the effects of different user cohorts and find that the opinion distance effect weakens the impact of investor sentiment on stock returns.

Suggested Citation

  • Long, Wen & Zhong, Yanqiang, 2023. "The neglected cohort: The impact of silent majority in social media on stock returns," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322005402
    DOI: 10.1016/j.frl.2022.103363
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    References listed on IDEAS

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    1. Behrendt, Simon & Schmidt, Alexander, 2018. "The Twitter myth revisited: Intraday investor sentiment, Twitter activity and individual-level stock return volatility," Journal of Banking & Finance, Elsevier, vol. 96(C), pages 355-367.
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    3. Tsukioka, Yasutomo & Yanagi, Junya & Takada, Teruko, 2018. "Investor sentiment extracted from internet stock message boards and IPO puzzles," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 205-217.
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    Cited by:

    1. Liu, Qingfu & Shi, Chen & Tse, Yiuman & Wang, Chuanjie, 2023. "The value of communication during pandemics," Pacific-Basin Finance Journal, Elsevier, vol. 82(C).
    2. Zhao, Yujie & Yao, Zhanghao & Li, Yuanqin & Zhou, Ping, 2023. "Can high-quality interactions lower the cost of debt? Insights from interactive investor platforms," Finance Research Letters, Elsevier, vol. 58(PC).

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