Voluntary information disclosure on social media

Highlights：

• This work studies information disclosure on social media from the perspective of companies rather than consumers. Information Systems (IS) literature focuses on User Generated Content (UGC) on social media and examines the value of social media content provided by users. This study considers how companies disclose or disseminate information on social media, i.e., Enterprise Generated Content (EGC), thus it differs from the existing social media literature.

• This work studies the cutting-edge communication mediums and social media for disclosure. Traditional mediums, such as official SEC reports or government filings, are widely studied in the literature of voluntary information disclosure. New technologies are increasingly made available for the use of information diffusion, for instance, RSS (Rich Site Summary), email alerts, mobile apps, social media platforms, etc. However, new communication mediums for information dissemination including social media have not been studied yet. We examine new mediums for information disclosure.

• We cluster companies into two groups based on their adoption of new mediums (social media, mobile apps, RSS, email alerts, etc.) for disclosure. Companies selected for this study are randomly chosen from the information industry and the manufacturing industry based on North American Industry Classification System (NAICS). We find that companies in the information industry are not necessarily advanced in the adoption of new mediums for disclosure and the amount of news released through social media. Our analysis clusters companies into either the group with high adoption level or the one with low adoption level regardless of their NAICS industry classification. We find that the companies in the high adoption group embrace more audience on social media and are leading in the intensity of information disclosure on social media.

• We show that voluntary information disclosure on social media is determined by the level of new media adoption and other factors such as information environment, information asymmetry, and firm's profitability. We find that a company's adoption level affects its intensity of information disclosure on social media. In addition, when a new medium becomes widely adopted and more popular for disclosure, voluntary information disclosure on the medium starts to catch the pattern of voluntary information disclosure on traditional filings and reports. Voluntary information disclosure on the medium can be explained by the determinants of voluntary information disclosure on traditional mediums (e.g., SEC filings or reports).