Impact of social networking sites (SNSs) on stock market: Review, synthesis and direction for future research

Abstract

Social networking sites (SNSs) provide a platform for disseminating different types of information, including stock market information. Many studies in the literature discuss the influence of social media on the stock market. However, little effort has been made in the past to present a literature review. This exploratory study aims to review the literature on social media and the stock market published from 2004 to 2018 and present insights and directions for future research. The study collects data from Scopus and ISI Web of Science databases and subjectively selects 126 papers, and conducts metadata analysis. In addition, the selected papers were analyzed to present the insights and classifications of the literature based on content analysis. This review classified the selected papers into different domains: reaction (e.g., investor behavior, market behavior, corporate governance and financial performance), data analysis techniques (mathematical, econometric models, data and text mining), and application of pre-established models. It identifies influential authors, top journals, top contributing nations, top contributing institutions, top citations, most used words, top publishers and contributions by fields. It develops a framework showing how the information of SNSs is disseminated, processed and responded to. It also finds that most of the paper outcomes support online social media as important information dissemination platforms for investment decisions in the stock market. The study will offer a novel opportunity for future assessment and contribution to the behavioral finance literature.