Voluntary information disclosure on social media

Abstract

Companies are increasingly using social media to communicate with consumers, and the content of those media affects consumer decision making. We investigate the adoption of new communication media (social media, mobile apps, email alerts, etc.) by companies to disclose company news to consumers and investors. Using a cluster analysis, we group companies either into a cluster with high adoption of new media or into one with low adoption, based on their use of new media for disclosure. We find that a company's voluntary information disclosure on social media is positively related to its adoption level of new media. Our findings suggest that the engagement of information disclosure on new media increases a company's influence and reach.