How Social Media Impacts Mass Media News Viewership in the Stock Market

Abstract

We explored in this study the impact of social media on the viewership of mass media news in the stock market. We argue that the popularity of a topic on social media can affect the viewership of news articles the next day on this same topic. Moreover, the detailed characteristics of how social media information is written can amplify this effect. Analyzing 1.4 million pieces of stock-related news and around 50 million stock-related social media posts for the years of 2013 and 2014 from Sina Finance and Sina Weibo, we found social media volume on a stock at time t-1 is associated with mass media news viewership on the same stock at time t; this effect increases when social media sentiment is more intense or more positive, or when the social media information source is more verifiable. Furthermore, we conducted causality tests to confirm the impact of social media on mass media news viewership. Our findings have implications for theory and practice, especially with respect to the design of news recommendation systems as well as recent policy and associated legislation that is based on an oversimplifying assumption that social media steals from the mass media audience.