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- Publisher Website: 10.1016/j.jfs.2020.100741
- Scopus: eid_2-s2.0-85083308574
- WOS: WOS:000540003100005
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Article: Wisdom of crowds before the 2007–2009 global financial crisis
Title | Wisdom of crowds before the 2007–2009 global financial crisis |
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Authors | |
Keywords | Social media Textual analysis Financial crisis Predictability Seeking alpha |
Issue Date | 2020 |
Publisher | Elsevier Inc. The Journal's web site is located at http://www.elsevier.com/locate/jfstabil |
Citation | Journal of Financial Stability, 2020, v. 48, p. article no. 100741 How to Cite? |
Abstract | Our paper examines whether investor opinions expressed in social media predicted stock returns of financial firms during the 2007–2009 global financial crisis. We conduct a textual analysis of the articles published on the stock market insight website Seeking Alpha before the crisis and find that banks that were described in articles with a higher fraction of negative words experienced (1) sharper drops in stock prices, (2) larger increases in expected default probability, and (3) greater surges in nonperforming loans during the crisis. Our evidence suggests that wisdom of crowds provides valuable information on how banks weather a forthcoming crisis. |
Persistent Identifier | http://hdl.handle.net/10722/289559 |
ISSN | 2023 Impact Factor: 6.1 2023 SCImago Journal Rankings: 1.837 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chau, M | - |
dc.contributor.author | Lin, CY | - |
dc.contributor.author | Lin, TC | - |
dc.date.accessioned | 2020-10-22T08:14:20Z | - |
dc.date.available | 2020-10-22T08:14:20Z | - |
dc.date.issued | 2020 | - |
dc.identifier.citation | Journal of Financial Stability, 2020, v. 48, p. article no. 100741 | - |
dc.identifier.issn | 1572-3089 | - |
dc.identifier.uri | http://hdl.handle.net/10722/289559 | - |
dc.description.abstract | Our paper examines whether investor opinions expressed in social media predicted stock returns of financial firms during the 2007–2009 global financial crisis. We conduct a textual analysis of the articles published on the stock market insight website Seeking Alpha before the crisis and find that banks that were described in articles with a higher fraction of negative words experienced (1) sharper drops in stock prices, (2) larger increases in expected default probability, and (3) greater surges in nonperforming loans during the crisis. Our evidence suggests that wisdom of crowds provides valuable information on how banks weather a forthcoming crisis. | - |
dc.language | eng | - |
dc.publisher | Elsevier Inc. The Journal's web site is located at http://www.elsevier.com/locate/jfstabil | - |
dc.relation.ispartof | Journal of Financial Stability | - |
dc.subject | Social media | - |
dc.subject | Textual analysis | - |
dc.subject | Financial crisis | - |
dc.subject | Predictability | - |
dc.subject | Seeking alpha | - |
dc.title | Wisdom of crowds before the 2007–2009 global financial crisis | - |
dc.type | Article | - |
dc.identifier.email | Chau, M: mchau@business.hku.hk | - |
dc.identifier.email | Lin, TC: chunlin@hku.hk | - |
dc.identifier.authority | Chau, M=rp01051 | - |
dc.identifier.authority | Lin, TC=rp01077 | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jfs.2020.100741 | - |
dc.identifier.scopus | eid_2-s2.0-85083308574 | - |
dc.identifier.hkuros | 317173 | - |
dc.identifier.volume | 48 | - |
dc.identifier.spage | article no. 100741 | - |
dc.identifier.epage | article no. 100741 | - |
dc.identifier.isi | WOS:000540003100005 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 1572-3089 | - |