Revising for 3rd round review at Journal of Accounting and Economics
Abstract: When public companies engage in practices perceived as ideologically polarizing, whether intentionally or not, they risk triggering social media boycotts, which could negatively impact stock prices. In this study, I ask whether ideological alignment between investors and boycotters (i.e., social media users boycotting a firm) affects investor responses to polarizing boycotts. Using Twitter users posting with cashtags to represent online investors, I determine investor ideology by the number of partisan Twitter accounts they follow and use ChatGPT to classify tweet sentiment. I find that investors express more negative sentiment towards targeted firms when they are ideologically aligned with boycotters. Content analysis of tweets suggests that investors’ assessment of boycotts’ impact can be driven by preferences related to financial value or identity congruence. For market outcomes, I find that polarizing boycotts are associated with a 2.3% decline in equity value over the 60 trading days after they gain social media traction. The negative price impact is stronger when investors ideologically aligned with the boycotters dominate social media discourse. Further, investor disagreement around boycotts increases when online investor ideology is more diverse. My findings show that social media boycotts of polarizing corporate stances have stock market ramifications, and that political ideology can influence how investors perceive such boycotts due to financial and non-financial preferences.
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)