Traditional Media, Twitter and Business Scandals

34 Pages Posted: 2 May 2017 Last revised: 8 Nov 2017

See all articles by John (Xuefeng) Jiang

John (Xuefeng) Jiang

Michigan State University

Michael Shen

National University of Singapore

Date Written: May 1, 2017

Abstract

We examine how traditional media and Twitter cover four business scandals: Wells Fargo fake accounts, EpiPen pricing hikes, Samsung Note 7 faulty battery, and Volkswagen’s cheating in emission tests. There are over 500 articles from Wall Street Journal, New York Times, Washington Post and USA Today and over 400 thousand tweets related to these events. Media organizations including newspapers, TV networks, and other media outlets are active Twitter users with significant followers. They only sent 1% of the scandal related tweets, but their tweets account for 39% of Twitter users that follow all scandal related tweets. Newspaper articles are more highly associated with a firm’s abnormal stock returns and trading volumes than individual tweets. Besides disseminating and magnifying the content of traditional media, individuals provide news lead to traditional media through Twitter (e.g., EpiPen). They also lead newspaper coverage (more timely). However, media and individual Twitter users differ in which scandals to cover and disseminate. Overall, we conclude that social media such as Twitter complement rather than substitute traditional media in covering business scandals.

Keywords: Twitter; Social Media; Business Scandal; Media Coverage

JEL Classification: G14, M10, M14

Suggested Citation

Jiang, John (Xuefeng) and Shen, Michael, Traditional Media, Twitter and Business Scandals (May 1, 2017). Available at SSRN: https://ssrn.com/abstract=2959419 or http://dx.doi.org/10.2139/ssrn.2959419

John (Xuefeng) Jiang (Contact Author)

Michigan State University ( email )

632 Bogue St Ste N505
Eli Broad College of Business
East Lansing, MI 48824
United States
517-432-3031 (Phone)
517-432-1101 (Fax)

HOME PAGE: http://sites.google.com/view/johnjiang

Michael Shen

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, Singapore 119245
Singapore

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