CEO social media activity and insider trading
Abstract This article studies the relationship between CEOs' social media activity and their insider trading behavior. Drawing on psychological evidence linking online activity to risk‐taking, we find that active CEOs on social media exhibit higher risk preferences and engage more in insider trading—particularly in terms of incidence, intensity, and profitability. The effects are primarily driven by insider buys (rather than sells), which are more likely to involve material non‐public information, and such opportunistic trades may increase firm reputational risk. Further analysis reveals that certain corporate governance mechanisms, such as blackout policies and compensation structures, help mitigate the negative impact.
Authors
- Zhichuan Li (ORCID: https://orcid.org/0000-0001-5585-5565)
- Claire Y.C. Liang (ORCID: https://orcid.org/0000-0001-7185-2997)
- Zhenyang Tang (ORCID: https://orcid.org/0000-0002-4182-9144)
Institutions
- Western University (CA)
- Clark University (US)
- Georgetown University (US)
- Xi’an Jiaotong-Liverpool University (CN)
Publication Details
- Journal
- The Journal of Financial Research
- Published
- 2025-08-21
- DOI
- https://doi.org/10.1111/jfir.70011
- Citations
- 2
- Primary Topic
- Digital Marketing and Social Media
- Type
- article
- Field-Weighted Citation Impact
- 8.40
Funders
- Université du Québec à Montréal
- Sun Yat-sen University
- Hangzhou Dianzi University
- Zhejiang University
- South China University of Technology
- China University of Mining and Technology
- Fuzhou University
- Xiamen University
- Hefei University
- Hefei University of Technology
- Minzu University of China
- Southwestern University of Finance and Economics
- Ivey Business School, Western University