The articles reviewed in this annotated bibliography are relevant to the proposed research because they contain investigative information on how the social networks and the investment habits of people in the stock markets relate. The articles have parallelism that information sent to investors through social networks affects their preferences in the stock markets.
Adler, P. S., & Kwon, S. W. (2002). Social capital: Prospects for a new concept. Academy of management review, 27(1), 17-40.
The authors of this article are Paul S. Adler and Seok-Woo Kwon. The authors are affiliated with the University of Southern California. The researchers look into the benefits, contingencies, and risks among several other variables that influence social capital. People have different preferences in their investments in the stock markets, but there is a possibility that investment trends in this area depend on the sentiments of close acquaintances. The investigators looked into this issue to clarify this.
According to their findings, socialization in the online platform is quite effective in the distribution of investment ideas. It can influence effectively the investment trends of the users of social media. This research is relevant to this study because it highlights the influence that social networks have on investment trends. Social media is a potent avenue to advertise and to share negative information about some companies.
Aerts, W., Cormier, D., & Magnan, M. (2008). Corporate environmental disclosure, financial markets, and the media: An international perspective. Ecological Economics, 64(3), 643-659.
Aerts, Cormier, and Magnan are affiliated with different universities and their research was aimed at identifying the correlation between environmental factors disclosure and the ability for the financial analysts to predict accurate profits for investors. Financial analysts are faced with the challenge of speculating the trends in the markets concerning the expected returns for different investments; hence, they have to rely on the available information.
The article reveals that social media can reveal effectively the nature of a business environment; hence, influencing investments. The relevance of this article to the research is its coverage of the importance of social networks in the delivery of important information about companies. This information helps the analysts to develop authentic predictions for the future of the capital markets.
CA, A. W. (2003). The role of the global reporting initiative’s sustainability reporting guidelines in the social screening of investments. Journal of Business Ethics, 43(3), 233-237.
Alan Willis, C. A. highlights the need for a company’s information to be availed to potential investors. Social media is a viable avenue to avail of the information. This would help investors make wise decisions on their investments in the stock markets. The research indicates that companies should ensure that the information available on social media is authentic and positive to attract investors.
This article is relevant to this research because it highlights the potency of social networks in dictating the trends of investments in the capital markets. The availability of information on companies helps investors make wise decisions about their investments. The shared information helps in determining the companies with the greatest potential for growth and profits.
Deegan, C. (2002). Introduction: the legitimizing effect of social and environmental disclosures–a theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282-311.
Deegan looks into the role of legitimacy in a company’s report in areas like financial accounting. The research reveals that the availability of legitimate information about the same influences the investment behavior of the potential businesspersons. Investors are most likely to venture into an investment with companies that have good financial records because this means that the companies are likely to pay the money back. Nobody is willing to invest in companies with poor financial performance records.
This article is relevant to the proposed research because it highlights the essence of accessing free information on social networks. The information about companies and their financial performance is available on various platforms in social networks. In social networks, people openly criticize the companies, offering their peers the chance to identify the best companies to invest within the capital markets.
Hong, H., Kubik, J. D., & Stein, J. C. (2004). Social interaction and stock‐market participation. The journal of finance, 59(1), 137-163.
This research indicates that people invest in the stock markets depending on their peers’ sentiments. Investors are likely to invest in a stock market with a company that the majority of their close friends prefer. Social media is therefore an influential factor of investment in the stock markets.
The research is relevant to this study because the study looks to identify the relationship between social networks and the trends in investments in the capital markets. As revealed in the research, people invest, depending on the information they have about specific companies in the stock markets. This means that social networks have a direct influence on investment trends.
Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, 53(1), 59-68.
In this article, Kaplan, and Haelein look into the impact of using social media as an investment booster for companies. The researchers undertook a comprehensive analysis of the best ways that companies can use social media to attract investors to their companies.
The relevance of this article to the research lies in the variables that the investigators studied. They are similar variables to those this research will be looking to identify.
Pollock, T. G., & Rindova, V. P. (2003). Media legitimation affects the market for initial public offerings. Academy of Management Journal, 46(5), 631-642.
Pollock and Rindova are affiliated with the University of Maryland. Their research revolved around the establishment of a relationship between the availability of information about a newly public company, and the behavior of investors. The findings reveal that the two variables are directly related.
This article is relevant to this research because the researchers have identified the relationship between the social networks and capita markets. It provides background information on the variables.
Richardson, A. J., & Welker, M. (2001). Social disclosure, financial disclosure, and the cost of equity capital. Accounting, Organizations, and Society, 26(7), 597-616.
Richardson and Welker look into the relationship between financial disclosure and the level of investments in the capital market. Their research reveals that the low performing companies have lower numbers of investors, depending on the amount of financial information available to the public.
The study is relevant to this research because it supports the findings of the rest of the researchers in the field. The capital markets are directly affected by the information available to investors in social networks.