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Reaching the public with Twitter: The reputation value of CEOs

Author

Listed:
  • Du, Yao
  • Linh, Tran Thi Thuy
  • Lu, Chien-Lin
  • Nguyen, Hong Thoa

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.

Suggested Citation

  • Du, Yao & Linh, Tran Thi Thuy & Lu, Chien-Lin & Nguyen, Hong Thoa, 2024. "Reaching the public with Twitter: The reputation value of CEOs," International Review of Economics & Finance, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:reveco:v:94:y:2024:i:c:s1059056024003411
    DOI: 10.1016/j.iref.2024.05.043
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    More about this item

    Keywords

    CEO Twitter; Compensation; Abnormal return; Information asymmetry; Earnings announcements;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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