Measuring the Dynamic Predictive Relationship of Social Media Metrics with Firm Equity Value: A Time Series Analysis

2019 Global Social Sciences Review  
In the online environment, social media metrics offer a credible basis of customer feedback in anticipating the firm performance. This study verifies the association of social media metrics of Face-book and Twitter to financial market performance. Data were collected from official Facebook pages and Twitter accounts of 3 fast-food companies over the time period of 6 months. Then established multiple metrics for respective social media platforms and develop outcomes using Vector Autoregressive
more » ... me series models to evaluate the instantaneous and continuing relationship between social media metrics and financial market performance of the firms in terms of unusual returns and idiosyncratic risk. Results indicated that FB metrics are significant leading indicators of firm equity value. However, Twitter metrics, have a weaker relationship with firm value as compared to FB metrics. Collectively, current research extends new visions for organizational top executives and investors concerning organizational equity valuation and the social media power transformation.
doi:10.31703/gssr.2019(iv-i).39 fatcat:jlzqxbya4zdy3fjlyyxb3tc6fe