Conference Agenda

We explore the director labor market consequences of social media use. Specifically, we identify directors in S&P 1500 firms who are active on Twitter and examine various director labor market outcomes. We find directors, particularly females and minorities, on Twitter are more likely to gain an additional directorship, a larger directorship and a directorship in a new industry each year than those who are not on Twitter. These results hold when controlling for time invariant unobserved director characteristics and when using an instrumental variable approach to control for endogeneity. They are strongest for directors, primarily females and minorities, who engage more with other directors via social media. Shareholders show more support for social-media-active directors through a greater (lesser) percentage of votes casts “For” (“Against”) their election and through a greater stock price reaction to the announcement of first-time director appointments. These results suggest that social media can play an important role in reducing traditional labor market frictions and facilitating more opportunities for minority and female directors.