Facebook drives behavior of passive households in stock markets

Milla Siikanen; Kestutis Baltakys; Juho Kanniainen; Ravi  Vatrapu; Raghava Mukkamala; Abid Hussain

doi:10.1016/j.frl.2018.03.020

Facebook drives behavior of passive households in stock markets

Milla Siikanen, Kestutis Baltakys, Juho Kanniainen, Ravi Vatrapu, Raghava Mukkamala, Abid Hussain

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Abstract

Recent studies using data on social media and stock markets have mainly focused on predicting stock returns. Instead of predicting stock price movements, we examine the relation between Facebook data and investors’ decision making in stock markets with a unique data on investors’ transactions on Nokia. We find that the decisions to buy versus sell are associated with Facebook data especially for passive households and also for nonprofit organizations. At the same time, it seems that more sophisticated investors—financial and insurance institutions—are behaving independently from Facebook activities.

Original language	English
Number of pages	11
Journal	Finance Research Letters
Volume	27
DOIs	https://doi.org/10.1016/j.frl.2018.03.020
Publication status	Published - Dec 2018
Publication type	A1 Journal article-refereed

Keywords

Investor behavior
Social media
Stock markets
Investor sophistication
Decision making

Publication forum classification

Publication forum level 1

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10.1016/j.frl.2018.03.020

1-s2.0-S1544612318301326-main
© 2018 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/BY-NC-ND/4.0/).
Final published version, 212 KBLicence: CC BY-NC-ND

http://urn.fi/URN:NBN:fi:tty-201901111086

Cite this

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title = "Facebook drives behavior of passive households in stock markets",

abstract = "Recent studies using data on social media and stock markets have mainly focused on predicting stock returns. Instead of predicting stock price movements, we examine the relation between Facebook data and investors{\textquoteright} decision making in stock markets with a unique data on investors{\textquoteright} transactions on Nokia. We find that the decisions to buy versus sell are associated with Facebook data especially for passive households and also for nonprofit organizations. At the same time, it seems that more sophisticated investors—financial and insurance institutions—are behaving independently from Facebook activities.",

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AU - Siikanen, Milla

AU - Baltakys, Kestutis

AU - Kanniainen, Juho

AU - Vatrapu, Ravi

AU - Mukkamala, Raghava

AU - Hussain, Abid

PY - 2018/12

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N2 - Recent studies using data on social media and stock markets have mainly focused on predicting stock returns. Instead of predicting stock price movements, we examine the relation between Facebook data and investors’ decision making in stock markets with a unique data on investors’ transactions on Nokia. We find that the decisions to buy versus sell are associated with Facebook data especially for passive households and also for nonprofit organizations. At the same time, it seems that more sophisticated investors—financial and insurance institutions—are behaving independently from Facebook activities.

AB - Recent studies using data on social media and stock markets have mainly focused on predicting stock returns. Instead of predicting stock price movements, we examine the relation between Facebook data and investors’ decision making in stock markets with a unique data on investors’ transactions on Nokia. We find that the decisions to buy versus sell are associated with Facebook data especially for passive households and also for nonprofit organizations. At the same time, it seems that more sophisticated investors—financial and insurance institutions—are behaving independently from Facebook activities.

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KW - Social media

KW - Stock markets

KW - Investor sophistication

KW - Decision making

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ER -

Facebook drives behavior of passive households in stock markets

Abstract

Keywords

Publication forum classification

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