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Emotions in Twitter communication and stock prices of firms: the impact of Covid-19 pandemic

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  • Suparna Dhar

    (NSHM Knowledge Campus)

  • Indranil Bose

    (Indian Institute of Management Calcutta)

Abstract

In this paper, we explored two key aspects of organization theory—organizational communication in the face of crisis and the influence of emotions expressed in social media communication and their impact on stock prices of firms. We extracted emotional content from 189,303 tweets and collected financial data for six quarters for 105 companies listed on the New York Stock Exchange from the Fortune 1000 list of companies. We operationalized a set of metrics to measure emotion in organizational tweets. Our analysis showed that the operationalized metrics to measure emotion expressed in organizational tweets were significant predictors of stock prices of firms. Further analysis showed a moderation effect of the crisis on the association between emotion expressed in organizational tweets and stock prices in the presence of control variables. The study provides a detailed analysis of constituent positive (happiness) and negative (anger, fear, and sadness) emotions in organizational tweets and their association with stock prices of firms. Practitioners and regulators may use the analysis and the metrics to assess organizational communication and better leverage Twitter for crisis response. This paper showcases organizational crisis response of Twitter and its financial impact.

Suggested Citation

  • Suparna Dhar & Indranil Bose, 2020. "Emotions in Twitter communication and stock prices of firms: the impact of Covid-19 pandemic," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 47(4), pages 385-399, December.
    • Handle: RePEc:spr:decisn:v:47:y:2020:i:4:d:10.1007_s40622-020-00264-4
    DOI: 10.1007/s40622-020-00264-4
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    References listed on IDEAS

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    Cited by:

    1. Shawn McCarthy & Gita Alaghband, 2023. "Enhancing Financial Market Analysis and Prediction with Emotion Corpora and News Co-Occurrence Network," JRFM, MDPI, vol. 16(4), pages 1-19, April.

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