What If 140 Characters Can Impact Your Company’s Market Value? Tweeting Corporate Social Responsibility and Stock Prices in the Financial Sector

Many firms signal, announce, and conduct organizational activities on the prevalent Information and Communication Technology Twitter. Then, do firms financially benefit from tweeting those activities? In this paper, we focus on corporate social responsibility (CSR) signaled through tweets and examine via the event study methodology the impact of CSR tweets on organizational effectiveness measured in abnormal stock returns. Our findings show that Twitter has a broadcasting power like tradition media; tweeting CSR impacts stock prices. Managers thus may want to announce organizational activities on the more cost-effective tool Twitter, rather than on press releases. We also demonstrate that tweeting CSR less frequently is more impactful on stock prices than tweeting CSR more frequently. Managers should also take advantage of these findings; tweeting similar messages over and over again might not be as effective in getting across a particular message