Social Media and Corruption†

Social Media and Corruption† AbstractDoes new media promote accountability in nondemocratic countries, where offline media is often suppressed? We show that blog posts, which exposed corruption in Russian state-controlled companies, had a negative causal impact on their market returns. For identification, we exploit the precise timing of blog posts by looking at within-day results with company-day fixed effects. Furthermore, we show that the posts are ultimately associated with higher management turnover and less minority shareholder conflicts. Taken together, our results suggest that social media can discipline corruption even in a country with limited political competition and heavily censored traditional media. (JEL G14, G34, L82, P23, P26, P34, Z13) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Applied Economics American Economic Association
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Publisher
American Economic Association
Copyright
Copyright © 2018 © American Economic Association
ISSN
1945-7790
D.O.I.
10.1257/app.20160089
Publisher site
See Article on Publisher Site

Abstract

AbstractDoes new media promote accountability in nondemocratic countries, where offline media is often suppressed? We show that blog posts, which exposed corruption in Russian state-controlled companies, had a negative causal impact on their market returns. For identification, we exploit the precise timing of blog posts by looking at within-day results with company-day fixed effects. Furthermore, we show that the posts are ultimately associated with higher management turnover and less minority shareholder conflicts. Taken together, our results suggest that social media can discipline corruption even in a country with limited political competition and heavily censored traditional media. (JEL G14, G34, L82, P23, P26, P34, Z13)

Journal

American Economic Journal: Applied EconomicsAmerican Economic Association

Published: Jan 1, 2018

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