Abstract
We explore the effect of managerial ability on firms’ tweeting activity. Using daily tweeting activity data, we find that managerial ability is positively associated with the frequency of daily tweets. Such association is prominent when the earnings news is unfavorable. We do not find the association when the earnings news is favorable. Furthermore, we find that firms with high ability managers tweet more when the sales news is unfavorable, but not when the sales news is favorable. Taken together, our findings suggest that managerial ability is an important factor for decision to communicate on Twitter and plays a significant role especially when markets perceive firm’s performance to be bad.
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