Social Media Publicity and New Product Entry via Entrepreneurs

We study the early-stage adoption of impossible meat products by local businesses, overcoming the common challenges in understanding new product entries via local intermediaries: 1) empirically tracking intermediary decisions at scale in a timely manner is difficult if not at all impossible; 2) marketing communications for the innovation is largely endogenous to unobserved demand shocks, making it hard to causally identify the driving factors behind the innovation adoption. Focusing on the key producers in their US market debut between 2015-2019, we construct a novel location-specific adoption metric that accurately measures the decisions of local intermediaries, and link it to comprehensive marketing communication extracted from social media corpus using Natural Language Processing. Using an identification strategy interacting the global shocks in news content with pre-determined local shares of topic-specific news consumption, we find that local news mentioning the innovation increases the regional adoption of impossible meat products by intermediaries. Interestingly, news content about producer financials appears to be as important as content about sustainability in driving local adoption of impossible meat products. We conjecture that financial news plays a role in boosting the perceived market potential of the innovation both by signaling the trustworthiness of the technology (thus lower uncertainty) and by reinforcing the trendiness of the technology (thus providing free marketing to small businesses who adopted the innovation). We further explore news topic heterogeneities by socio-economic conditions and timing.