Do(n’t) believe everything you hear about disclosure: Twitter and the voluntary disclosure effect

Publication Date


Document Type


Publication Title

Financial Markets and Portfolio Management




This study reveals a positive relationship between disclosure through Tweets and institutional ownership, especially after the maximum number of characters per Tweet is doubled. The character limit increase likely has drawn media attention to Twitter as a disclosure medium and has established it as a respectable and trustworthy disclosure channel among institutional investors. Additionally, changes in institutional ownership are more pronounced for higher levels of Twitter disclosure, suggesting that investors are more sensitive to disclosure changes in more transparent information environments. As managers tend to avoid disclosure of negative news through fast-paced Twitter and at the same time make use of Twitter’s dynamic nature to disseminate positive news as quickly as possible, the effect on institutional ownership is more pronounced for positive Tweets, contrary to other disclosure channels. Finally, for decreases of Twitter disclosure measured as the frequency of Tweets, a change in Twitter disclosure is associated with a stronger reaction of institutional ownership. This result emphasizes the importance of Twitter disclosure for the overall information environment of a firm.


Disclosure, Information asymmetry, Institutional investors, Twitter


Accounting and Finance