Determinants of Poster Reputation on Internet Stock Message Boards

Determinants of Poster Reputation on Internet Stock Message Boards,Ying Zhang

Determinants of Poster Reputation on Internet Stock Message Boards  
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Problem statement: I investigate the determinants of poster reputatio n in a user-rewarding reputation system on Thelion!WallStreetPit stock me ssage board. My empirical analyses deal with two hypotheses: First, is a poster's reputation affecte d by his/her characteristics at the time the messag e was posted? Second, is reputation also associated w ith the characteristics of the stock to which the message refers? Approach: To answer these two questions, I tested two sets o f explanatory variables in relation to poster reputation in two fixed-effec ts panel regressions. Results: First, the poster's popularity in the community, the poster's sentiment , information quality not quantity and one day follow-up opinion on the stock all have positive im pacts on the poster's reputation; Second, recommending stocks with high price to earnings rat io and high institutional investors holding percentage reduce the chance of receiving reputatio n credits while promoting high liquidity stocks did the opposite. Conclusion: This study discarded light on the future construct ion of a credit-weighted sentiment index should the researchers consider wei ghing each poster's sentiment based on its reputation. This study also helped us to build a mo re effective and better functional reputation syste m in the future. Finally, findings in this study allo wed us to better examine the relationship between sentiment and stock returns in future studies.
Published in 2009.
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