Investor relations in the era of social media: systematic literature review of social media as a strategic corporate disclosure tool

Abstract

Purpose This paper aims to systematically review how corporations are increasingly using social media to strategically disseminate information to investors, including different research tracks, then identify the gaps to propose future research opportunities. Design/methodology/approach The authors searched for relevant scholarly work on Scopus and Google Scholar databases published during the period 2000–2020 in English. Both quantitative and qualitative papers were reviewed. Articles were filtered based on their relevance to the study's goal, resulting in the selection of 84 articles. A total of 16 articles were selected for inclusion in the systematic review. Findings In light of the existing studies’ limitations, this paper derives and summarizes 16 leading future research tracks. Results indicated that corporations could use social media to reduce information asymmetry between managers and investors. Nevertheless, social media for information disclosure purposes is used in a strategic way, whereby only positive news and voluntary information are disseminated. Research limitations/implications The implications for investors are that they can make better decisions by engaging in the process of “the wisdom of crowd,” which is facilitated by reciprocal communication. The implications for corporations are that sharing earning information through social networking platforms presents them with an opportunity to effectively manage their investors by reducing negative perceptions and increasing market response. Originality/value As far as we know, this is the first paper that uses a systematic literature review over the social media research field.