How Does Social Media Sentiment Impact Mass Media Sentiment? A Study of News in the Financial Markets

Journal of the Association for Information Science and Technology, forthcoming

29 Pages Posted: 12 Aug 2019 Last revised: 23 Mar 2021

See all articles by Jie Ren

Jie Ren

Fordham University

Hang Dong

IE University

Balaji Padmanabhan

University of South Florida - College of Business Administration

Jeffrey V. Nickerson

Stevens Institute of Technology - School of Business

Date Written: August 8, 2019

Abstract

Mass media sentiment of financial news significantly influences investment decisions of investors. Hence, studying how this sentiment emerges is important. In years past this was straightforward, often dictated by journalists who cover financial news, but this has become more complex now. In this paper we focus on how social media sentiment affects mass media sentiment. Using data from Sina Weibo and Sina Finance (around 60 million weibos and 6.2 million news articles) we show that social media does influence mass media sentiment emergence for financial news. The sentiment consistency between social media reaction and prior news articles amplifies the persistence of mass media sentiment over time. By contrast, we found limited evidence of social media reducing the persistence of mass media sentiment over time. The results have significant implications for understanding how two types of media, treated separately in the literature, may be connected.

Keywords: sentiment emergence, social media, IS/finance interface, financial information systems, financial markets

Suggested Citation

Ren, Jie and Dong, Hang and Padmanabhan, Balaji and Nickerson, Jeffrey V., How Does Social Media Sentiment Impact Mass Media Sentiment? A Study of News in the Financial Markets (August 8, 2019). Journal of the Association for Information Science and Technology, forthcoming, Available at SSRN: https://ssrn.com/abstract=3434163 or http://dx.doi.org/10.2139/ssrn.3434163

Jie Ren (Contact Author)

Fordham University ( email )

Rose Hill Campus Bronx
New York, NY 10458
United States

Hang Dong

IE University ( email )

Calle Cardenal Zuñiga, 12.
Segovia, 40003
Spain

Balaji Padmanabhan

University of South Florida - College of Business Administration ( email )

4202 E. Fowler Avenue, BSN 3403
Tampa, FL 33620-5500
United States

Jeffrey V. Nickerson

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

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