Does corporate online interaction activeness affect investors’ perceptions of earnings information? Evidence from China

ABSTRACT

This study investigates the effect of corporate online interaction activeness on investors’ perceptions of earnings information. Using a large sample of Chinese listed firms for the period 2010–2019, we find that investors’ perceptions of earnings information, measured by earnings response coefficients (ERCs), increase with the level of corporate online interaction activeness, and the effect is more pronounced in firms with a larger retail investor base and higher stock illiquidity. Our results suggest that social media interaction helps to improve stock price efficiency.

KEYWORDS:

• Social media
• online interaction activeness
• earnings response coefficients (ERCs)
• investor perceptions

JEL CLASSIFICATION:

• M41
• G30

Acknowledgments

This work was supported by the Youth Fund Project of Humanities and Social Sciences of the Ministry of Education in China (18YJC790204) and the research fund from Sichuan University (SKSYL201822, 2018hhf-47, SCU-BS-PY-202003, 2013SCU04A32)

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The primary textual data of interaction transcripts we collected include investors’ account name, question time, question content, firms’ reply time and reply content.

² We thank an anonymous referee for suggesting these tests. These results are available upon request by email.

Additional information

Funding

This work was supported by the Ministry of Education of the People’s Republic of China [18YJC790204]; Sichuan University [2013SCU04A32,2018 hhf-47,SCU-BS-PY-202003,SKSYL201822].