Discretionary Disclosure on Twitter

Date
2017-08-31
Authors
Crowley, Richard
Huang, Wenli
Lu, Hai
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Abstract
Using a sample of 12.8 million tweets from S&P1500 firms with active Twitter accounts from 2012 to 2016, we show that firms selectively disclose corporate events on Twitter and choose to post financial disclosures on Twitter more frequently around earnings announcements, accounting filings, and firm-specific news events. Financial disclosures on Twitter are more likely to contain media (image or video) and links around these events. Consistent with predictions from disclosure theory, both effects are strong when the sign of the news is clearly negative or positive. The above patterns of timing and usage of media and links are robust in intraday analysis. We also find that firms with lower institutional ownership are more likely to exercise discretion. These findings suggest that firms choose events, format, and timing discretionarily when disclosing news on social media.
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Keywords
Social media, discretionary disclosure, Twitter
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