Social Media Analysts and Corporate Innovation Strategy
Abstract
We study non-traditional investment research as a source of information for corporate strategic decisions, such as investments into innovation. Using a comprehensive sample of social media analyst reports from Seeking Alpha and exogenous variation in social media analysts' coverage overlaps, we show that firms are more likely to invest into technologies similar to firms covered by the same analyst. The effect varies with social media analysts' characteristics and differences in their contributed content that capture their unique information set. Overall, our results are consistent with non-traditional investment research enhancing firms' information environment as an additional source of information that guides corporate strategic decisions.