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Sustainability 2019, 11(2), 320; https://doi.org/10.3390/su11020320

Does Social Network Sentiment Influence S&P 500 Environmental & Socially Responsible Index?

Department of Business Administration, University of Santiago de Compostela, Faculty of Business Administration and Management, Ave. Alfonso X El Sabio s/n-27002 Lugo, Spain
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Received: 27 December 2018 / Revised: 5 January 2019 / Accepted: 7 January 2019 / Published: 10 January 2019
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Abstract

The influence of social network sentiment on stock market indices and companies has been proven in several studies. However, the influence of social network sentiment on sustainability indices and sustainable companies has not been analyzed so far. Therefore, this study analyzed the influence of social network sentiment on sustainability indices (S&P 500 Environmental & Socially Responsible Index) and focused on variations of this influence on sustainable and non-sustainable companies, namely, in companies included in the Information Technology sector. To this end, two methodologies were used: GARCH (1,1) models and logit-probit models. The results showed that social network sentiment influences S&P 500 Environmental & Socially Responsible Index’s volatility; this influence was greater than the influence of social network sentiment when considering the S&P 500 Index. Additionally, the results showed that social network sentiment influences sustainable companies’ returns but had no effect on unsustainable companies’ returns. These results highlighted the importance of managing the companies’ profiles in social networks and their corporate image in general, because investors will consider these aspects to design their investment strategies. View Full-Text
Keywords: sustainability indices; S&P 500 Environmental & Socially Responsible Index; social network sentiment; S&P 500 Index; Information Technology sector sustainability indices; S&P 500 Environmental & Socially Responsible Index; social network sentiment; S&P 500 Index; Information Technology sector
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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López-Cabarcos, M.Á.; Pérez-Pico, A.M.; López-Pérez, M.L. Does Social Network Sentiment Influence S&P 500 Environmental & Socially Responsible Index? Sustainability 2019, 11, 320.

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