Revising for 3rd round review at Journal of Accounting and Economics
Abstract: Boycotts triggered by public companies’ practices perceived as ideologically polarizing can lead to negative investor reactions. In this study, I examine how the stock market responds to such boycotts and whether ideology-driven social media discourse shapes this response, given investors’ increasing reliance on social media information for decision-making. On average, polarizing boycotts are associated with a 1% (2.3%) drop in equity value over the 7 (60) trading days after gaining online traction. Immediate price decline is more pronounced when social media discussions are dominated by users ideologically aligned with the boycotters, particularly when their posts attract online engagement, emphasize financial impact, or come from influential, prolific users. I also find modest evidence that return volatility following boycotts increases when the ideological beliefs of social media posters are more diverse. My findings suggest that polarizing boycotts against corporate actions have stock market ramifications, and that ideology-driven social media opinions seem to amplify both price decline and volatility.
Presented at the University of Washington (2023, 2024), AAA/Deloitte Foundation/J. Michael Cook Doctoral Consortium (2023), AAA FARS Midyear Meeting (2024), George Mason University (2024), University of Georgia (2025), Arizona State University (2025), Indiana University (2025), University of Southern California (2025)
Revising for 2nd round review at The Accounting Review
Abstract: With social media platforms such as Twitter, firms can easily engage with public discourse, i.e., public conversations involving many stakeholders and topics ranging from #TacoTuesday to #StopAsianHate. We ask whether and how investors respond to corporate participation in public discourse. Using various measures of investor attention (Twitter cashtag mentions (e.g., $CRM), Reddit mentions, retail trading, and total trading volume), we find greater investor attention when firms engage with active public discourse with messages that garner high online user impressions. We also find some evidence that when firms engage, they are more likely to face online scrutiny and more extreme market outcomes, especially when engaging with polarizing topics. Finally, when we consider investor preference alignment, we find that ESG fund ownership increases after firms engage meaningfully with environmental trending topics, even controlling for general environmental tweets. These findings broaden our understanding of firm communication and investor response to firms speaking out.
Presented at the University of Washington (2021), AAA Western Region DSFI (2022), UBC/Oregon/Washington Conference (2022)*, University of Delaware (2023)*, CUHK-Shenzhen (2024)*, George Washington University (2024)*, Tulane University (2024)*
Based on second-year summer paper
* = Presented by a co-author
Presented at Indiana University (2025), the University of Washington (2024)