Social media and the stock markets: an emerging market perspective

    Shweta Agarwal   Affiliation
    ; Shailendra Kumar Affiliation
    ; Utkarsh Goel Affiliation


There are numerous studies that examine the impact of social media on the stock market performance but there is a paucity of such evidences from the emerging economies. Today many multinational banks and other financial conglomerates from the developed countries are expanding their operations to the emerging markets, known for their rapid growth. The businesses in developed countries prefer using social media to reach out to their stakeholders. This might be a challenge as emerging markets are very different from the developed markets in terms of infrastructure and stock market development. This study performs the sentiment analysis of the tweets about the Indian companies that are a part of Nifty50 or any sectorial index, for a period of 15 months. The results from the Granger-causalty tests indicate that the Twitter sentiments have a significant relationship with the indices related to the banking and financial sectors of the Indian stock markets. Results from the Impulse Response Function reveal that, on the index returns, the impact of the negative sentiments stays for a longer period of time than the positive sentiments. This study would help businesses use social media effectively for information sharing and dissemination in the new environment.

Keyword : emerging economies, sentiment analysis, social media, Twitter, Indian stock markets, market efficiency, impulse response

How to Cite
Agarwal, S., Kumar, S., & Goel, U. (2021). Social media and the stock markets: an emerging market perspective. Journal of Business Economics and Management, 22(6), 1614-1632.
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Nov 18, 2021
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