Oct 23, 2012

Political Blogs

Do they matter? 
In authoritarian countries, the means to hold politicians and public officials accountable are limited, because traditional media is often censored, politics is not competitive, and electoral fraud prevents political turnover. Our results imply that posting in online social networks can affect the stock performance of state-controlled companies, and, as a result, can become an unusual alternative mechanism to put additional checks on the behavior of government officials even without a major change of the government.
We show that there are effects of two types. First, there is a short-term attention effect, which is limited to several hours after the blog posting and is easily diminished if some other interesting postings are made available at the same time. Second, there is a longer-term effect of blog postings that is more consistent with information story. Longer-term effects imply that, presumably, blog postings can provide incentives for the managers of state-controlled companies to behave well.
Source: Abstract, paper

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