Pay attention to what your employees are saying!

CFRA Right on the money

What Do Employees Know? Evidence from a Social Media Platform

CFRA Right on the money: "What Do Employees Know? Evidence from a Social Media Platform"

Kelly Huang (Florida International University), Meng Li (University of Texas at Dallas) and Stanimir Markov (University of Texas at Dallas) study the information content of employee social media disclosures from Using over 500,000 employee predictions containing their companies’ six-month business outlook, they find that the average employee outlook is incrementally informative in predicting the respective firm’s future operating performance. Its information content of the outlook is better the more disclosures are aggregated from a larger, more diverse, more knowledgeable employee base. Also, employee social media disclosures are relatively more important as a source of bad news. Average outlook also helps to predict future returns of firms that attract less attention by analysts and investors.

Read full paper Huang, K., M.Li, and S.Markov. 2020. “What Do Employees Know? Evidence from a Social Media Platform.” The Accounting Review 95 (2): 199-226.

About CFRA 42 Articles
CFRA aims to provide an effective contribution to scientific research and practice-oriented, pragmatic transfer of knowledge on financial reporting and auditing, as well as financial management more generally. In our Right on the money series, we share easy-to-understand summaries of emerging research in the field. For more information visit CFRA's Website and LinkedIn.

Be the first to comment

Leave a Reply

Your email address will not be published.