An Analysis of the Impacts of Interaction using Social Media Platforms on Stock Liquidity

Abstract

Social media platforms have developed into a way for more and more investors to interact with each other, and investors are interacting more and more frequently on social media platforms. The study looked at the association between the number of forum posts in the Oriental Wealth stock bar as a measure of social media interaction and stock liquidity as a measure of turnover rate is examined through a panel fixed-effects model, and the analysis results suggest that the number of bar posts has a significant positive effect on stock turnover rate, which indicates that the interaction on social media platforms affects the liquidity of stocks, and the more frequent the interaction is, the higher the liquidity of stocks is. This study provides empirical evidence for the field of investors' social media interactions and stock liquidity, while individual stock companies and regulators should also pay attention to investors' interactions on social media platforms, and do a good job of communicating with investors in a healthy way to avoid abnormal fluctuations in the stock market.