Liquidity Risk and Investors' Mood: Linking the Financial Market Liquidity to Sentiment Analysis through Twitter in the S&P500 Index

[EN] Microblogging services can enrich the information investors use to make financial decisions on the stock markets. As liquidity has immediate consequences for a trader's movements, this risk is an attractive area of interest for both academics and those who participate in the financial markets. This paper focuses on market liquidity and studies the impact on liquidity and trading costs of the popular Twitter microblogging service. Sentiment analysis extracted from Twitter and different popular liquidity measures were gathered to analyze the relationship between liquidity and investors' opinions. The results, based on the analysis of the S&P 500 Index, found that the investors' mood had little influence on the spread of the index.Guijarro, F.; Moya Clemente, I.; Saleemi, J. (2019). Liquidity Risk and Investors' Mood: Linking the Financial Market Liquidity to Sentiment Analysis through Twitter in the S&P500 Index. Sustainability. 11(24):1-13. https://doi.org/10.3390/su11247048S113112

Twitter sentiment analysis: applications in healthcare and finance

This research explores the influence of Twitter sentiment on healthcare and finance industries. It assesses how Twitter sentiment and culture measure influence COVID-19 statistics, and it investigates the impact of Twitter sentiment on S&P 1500 stock mispricing. Furthermore, it examines how tweet sentiment predicts major industry returns. The first part examines how Hofstede’s Culture Dimensions (HCD) and Twitter economic uncertainty index (TEU) relate to COVID-19 infection rate and death rate. The results show certain aspects in HCD, such as power distance index (PDI) and masculinity (MAS) both are negatively and significantly associated with the infection rate, while indulgence (IVR) and long-term orientation (LTO) exhibit negative statistical significance to the death rate. TEU based in USA is relevant to COVID-19 death rate in short run (up to 3 months). Some practical strategies are proposed for public health officials to help mitigate COVID-19 spread. The second part bridges a research gap by exploring the relation between aggregated tweet contents and stock market mispricing. In short, tweet features affect future stock mispricing, in different directions and magnitudes. For overvalued stocks, tweet variables including proportion of external links, average number of words, percentage of retweets, likes and replies are negatively associated with mispricing of S&P 1500 stocks. Average number of words possibly reduces mispricing by reducing idiosyncratic volatility, while proportion of external links can mitigate mispricing via channels other than liquidity or idiosyncratic volatility. For undervalued stocks, only average number of words is positively related to mispricing; average number of words affect mispricing via channels other than liquidity or idiosyncratic volatility. Additionally, this study investigates how tweet sentiment from S&P 1500 firms predicts major industry returns by constructing multiple sentiment indices. The robustness tests show highly consistent results, proving such indices can predict the returns from three out of five major industries, including Consumables, High Technology and Healthcare. In general, the sentiment index type and prediction length do not matter much. In conclusion, this research shows tweet sentiment is more than some meaningless noise. Instead, it has beneficial applications in both healthcare and finance fields, such as COVID-19 pandemic prediction and possible investment reference

Social Public Health System and Sustainability

This edited volume contains 18 articles published in Sustainability from late 2018 to early 2021. During that time, the world faced the fatal and widespread health crisis, COVID-19, which had threatened the social and public health systems at every corner for quite some time.As the Guest-Editors and also a contributing authors, we are glad that the academic contents from the Special Issue will now be put together in this volume, making the authors' hard work and efforts accessible to the larger audience

New Perspectives about Financial Intermediation: Disruption by Senior Managers and Financial Technologies

This dissertation consists of three chapters that span managerial styles, financial technologies, and social interactions. Chapter 1 Banks increase credit risk-taking in syndicated bank loans when their systemic risk increases; however, the interrelationship across risks depends on bank managerial styles. Using a connectedness sampling method to differentiate patterns of business policy styles and systemic risk-taking among managers, I find that credit risk-taking is more sensitive to the bank\u27s systemic risk if the manager exhibits a preference for systemic risk. Asset-innovating managers (exhibiting a preference for non-traditional forms of income and assets) take higher credit risk in their loan portfolios, but marginally reduce their credit risk during systemic crises. In contrast, liability-innovating managers (relying on non-traditional funding sources) generally take less credit risk, but increase their credit risk during systemic crises. Bank-level differences cannot explain the observed heterogeneity across banks. Chapter 2 This chapter studies whether FinTech mortgage lenders fill the credit gap left by non-FinTech lenders (i.e., traditional banks and non-FinTech shadow banks). Using natural disasters as shocks to local mortgage demand, I find different reactions between FinTech and non-FinTech lenders. First, FinTech lenders and traditional banks expand lending after demand shocks, while non-FinTech shadow banks do not. Second, non-FinTech lenders tighten lending standards after demand shocks, whereas no evidence shows that FinTech lenders change lending standards or risk-taking. Third, non-FinTech lenders tend to ``cherry pick\u27\u27 good borrowers after demand shocks, and no similar behavior is observed on FinTech lenders. However, there is little support that FinTech loans originated after demand shocks perform worse. These results suggest that the adoption of financial technologies allows FinTech lenders to meet local credit demand more efficiently. Chapter 3 I examine the effects of social connectivity on the demand for and supply of consumer and small business loans on peer-to-peer (P2P) FinTech sites such as LendingClub. P2P loan demand increases when geographically distant, but socially connected areas have large amounts of past P2P borrowing activity. Both approval rates and quality (as measured by loan grade and interest rates) are higher the greater an area\u27s aggregate online social connections. Performance (i.e., reductions in defaults or delayed payments) is enhanced by social connectivity indicating that information diffusion through online social networks improves lending outcomes for both high and low risk borrowers

The grammar of money: an analytical account of money as a discursive institution in light of the practice of complementary currencies

Since the global financial crisis in 2008, complementary currencies - from local initiatives like the Brixton Pound to timebanks, business-to-business currencies and, of course, Bitcoin - have received unprecedented attention by academics, policy makers, the media and the general public. However, at close theoretic inspection money itself remains as elusive a phenomenon as water must be to fish. Economic and business disciplines commonly only describe the use and functionality of money rather than its nature. Sociology and philosophy have a more fundamental set of approaches, but remain largely unintegrated in financial policy and common perception. At the same time, new forms of currency challenge predominant definitions of money and their implementation in the law and financial regulation. Unless our understanding of money and currencies is questioned and extended to consistently reflect theory and practice, its current misalignment threatens to impede much needed reform and innovation of the financial systems towards equity, democratic participation and sustainability. After reviewing current monetary theories and their epistemological underpinning, this thesis proposes a new theoretic framework of money as a ‘discursive institution’ that can be applied coherently to all monetary phenomena, conventional and unconventional. It also allows for the empirical analysis of currencies with the methodologies of neo-institutionalism, practice theory and critical discourse analysis. This will here be demonstrated in a transdisciplinary triangulation concerning three sets of data from the diverse field of complementary currencies, the publications of the Bank of England and monetary laws from the United States. The findings do not only demonstrate the heuristic value of the theory of discursive institutionalism in regard to money and complementary currencies, but highlight how regulatory and legal definitions even of conventional money lack the coherence and clarity required to appropriately explicate monetary innovation. Accordingly, this study concludes with recommendations for monetary theory, policy and research that can address the current inconsistencies