Watch your language! What CEO tweets tell about firm performance and how they change due to COVID-19

Abstract

Language is the primary tool for business communication and exerts its influence during both times of crisis and stability. This study examines the power of CEO language and investigates its link to firm performance, firm reputation and crisis management. Therefore, the language style of 144 CEOs was analyzed using their messages on Twitter before and during the COVID-19 crisis. In essence, CEOs who tweet more often about their achievements and motivational drive and who use more assertive and community-related language manage financially more successful firms. Notably, CEO language directly relates to various financial indices of firm performance including assets, profit or revenue. The findings reveal that the power of CEO language partly lies in its effect on firm reputation. When CEOs send tweets rich in achievement-oriented, assertive, driven and community-orientation expressions they nourish the firms’ reputation, which then feeds the firms’ financial performance. Notably, CEOs adapt their language on Twitter in critical times, such as during the COVID-19 crisis, and use more personal and socio-relational expressions with an emphasis on affiliation and community but also on negative emotions like anger during the crisis. Concluding, this study demonstrates the power of CEO language on social media and provides insights on how it changes in times of crisis. Its implications are discussed in light of the upper echelons theory and impression management theory.