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Session 2.24: The Influence of Social Media Bots on Financial Markets
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| Presentations | ||
The Influence of Social Media Bots on Financial Markets 1Roger Williams University, United States of America; 2University of Texas at Arlington, United States of America This study examines the effects of bot-generated social media content on stock market behavior. We examine whether bots amplify or suppress the impact of social media on trading activity and returns. Using data from Twitter (now X), covering 2019 to 2022, we construct measures capturing the likelihood of bot activity in posts mentioning well-known stocks using cashtags. Our findings show that bot activity reduces the impact of social media on both trading volume and returns. Our results imply that investors have the ability to distinguish between genuine and automated activity on social media and that genuine activity is perceived as a more reliable source of financial information. | ||