Activity in Social Media related to Business Events: The Case of Merger Announcements

Abstract

Investors use social media in order to access and exchange information regarding recent events in the business and financial domain. Social media support investors to reduce uncertainty about the implications and the evaluation of such business events. Companies benefit from these event-related activities in social media, for instance with regard to business intelligence purposes. Therefore, it is important for companies to understand why some business events attract more activity in social media than others as well as when investors make use of different types of social media to exchange information related to business events. This cumulative dissertation investigates how the announcement of business events affects the activity in social media and the choice of social media type. This is investigated in the context of merger announcements representing a major business event with uncertainties on many levels. Two categories of influencing factors are considered to explain event-related activity in social media: event-specific factors (i.e. event characteristics) and firm-specific factors (i.e. firm characteristics). The research presented in this dissertation provides evidence that both event characteristics related to information needs of investors as well as firm characteristics related to the visibility of the involved firms explain the event-related activity in social media and the choice of social media type.