What is local seldom remains local: Social media, foreign chatter, and stock performance of multinational firms

Abstract

As social media has penetrated into our life, multinational firms face a dynamic and interconnected international environment. Since online social media could make the marketplace borderless by promoting information dissemination, what is local seldom remains local. However, despite much anecdotal evidence, there is little empirical evidence on the relationship between foreign chatter in social media and stock market performance of multinational firms. To investigate the impact of foreign chatter, we collect about 1.9 billion tweets from Twitter over the period from July 2012 to July 2013. Then, we filter out the tweets which mention the S&P 500 firms, leaving about 16 million tweets. The most used language is English, accounting for 57.5%, followed by Spanish (10.4%). Other languages account for about 32%. We expect that this study would be the first study to investigate the impact of foreign chatter in social media on multinational firms, using a large-scale Twitter data.