Messaging without a Message: Executive Value and Social Media Activity

We show that executives who start tweeting benefit from better career options. We motivate this finding using the well-established theories of limited attention and social
contagion. Consistent with this framework, we find that content is irrelevant. Comparative statics are consistent with our theories. In particular, the effect of Twitter is concentrated among executives who were unrecognized and who were underpaid before they started tweeting, who garner greater public attention from their social media activity, who enjoy higher professional mobility, and who operate in environments where compensation setting is less structured. We show that tweeting is not a panacea for executive compensation and that the decision to tweet is not driven by the expectation of promotion. In contrast to claims by consultants, we also show that executive personal activities on social media such as Twitter do not affect firm value.