The Influencer Copycats

Abstract

Influencers on social media share insights through their online posts, which substantially impact the perspectives and decisions of follower investors. Our research constructs the similarity of influencer posts gathered from a prominent financial social media platform, leveraging large language models for profound semantic understanding of posts. We find that influencers increase their follower investment amount, short-term following and content monetization potential by imitating the posts of their peers, especially those who have displayed exceptional performance on social media. However, influencers are less likely to imitate their peers during periods of low investor sentiment in the securities market. While influencer post similarity positively affects their own short-term benefits, it does not significantly improve the investment performance of their retail investor followers.

Keywords: Influencers, Social Media, Large Language Models, Retail Investors

JEL Classification: G11, G14, G41