Social Media Engagement with the Business Press
Abstract: The spread of information through social media networks can coordinate widespread beliefs and shift public perception. I investigate the influence of social media engagement using an important information intermediary and corporate monitor: the business press. Consistent with a reduction in awareness costs for investors, I find that social media engagement with the business press is positively associated with trading volume. However, I also find evidence that social media engagement impedes market efficiency—a result that appears to be driven by positively biased trading. Turning to the monitoring role of the business press, I find that social media engagement with the business press is associated with heightened monitoring by potential litigators and corporate boards. Finally, social media engagement appears to influence journalists directly, as higher engagement with negative articles is associated with greater monitoring in future articles.
Baruch College, Darden School of Business, Indiana University, London Business School, New York University/NYU Shanghai, Northwestern University, Ohio State University, Pennsylvania State University, Rice University, Texas A&M University, University of Iowa, University of Michigan, and University of Notre Dame
Coauthored with Thomas Bourveau and Anthony Le
Abstract: We leverage the release of standardized Equal Employment Opportunity (EEO-1) reports for over 800 federal contractors to provide empirical evidence on public firms’ diversity practices. Using our unique data for 2016-2020, we first document that public firms exhibit a significant lack of diversity, especially among first and middle managerial ranks. Second, we find robust evidence that underperformance in workforce diversity is associated with the decision to withhold the public release of firms’ EEO-1 forms. Overall, our results suggest that market forces are unable to achieve unraveling, and a disclosure mandate may be necessary for investors to observe the DEI practices of all firms, rather than just the more virtuous ones.
Coauthored with Emily Shafron, Nate Sharp, and Brady Twedt
Abstract: We survey 211 corporate media relations officers and conduct 12 follow-up interviews to examine the role media relations officers play in shaping a company’s information environment. Media relations officers indicate they are very involved in company messaging around mergers and acquisitions, changes in the senior executive team, and new product launches. We find that nearly one in four public companies hosts a quarterly conference call exclusively for members of the media in conjunction with earnings releases, and media relations officers view The Wall Street Journal and LinkedIn as the most influential traditional media outlet and social media platform, respectively. Revealing their positive bias, media relations officers are far more likely to post on social media when their company announces positive earnings news compared to negative earnings news. Overall, our findings shed light on the ways media relations officers share their company’s message across an evolving media landscape.
London Business School Accounting Symposium (Flam)
Private Equity Public Disclosures
Coauthored with Lisa Tiplady and Elizabeth Tori
Abstract: The private equity industry is characterized by limited regulatory oversight and private communication with investors. Despite this opacity, we identify a nontrivial number of public press releases issued by private equity firms. Our results are consistent with private equity firms issuing press releases to communicate with potential investors, as they issue drastically more press releases in fundraising windows and following SEC amendments expanding the pool of investors eligible to invest in private markets. Press releases appear effective as they are associated with higher fund growth overall and a greater proportion of new investors following the SEC amendments.
Bayes Business School (Flam), INSEAD (Flam), Massachusetts Institute of Technology (Flam)