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This study examines 9,861 public firms to investigate the current adoption status of two popular social media platforms (Facebook™ and Twitter™) and their application in corporate disclosure. The investigation is based on the framework defined by Meek, Roberts, and Gray (1995) and on variations in platform, industry, firm size, time, and intensity (i.e., accounts owned, messages released, and user interaction). The results show that 49 percent of the firms have adopted one platform, and 30 percent have adopted both platforms. However, the numbers of new adopters on both platforms have been decreasing continuously since 2010, even though more than half of the firms are yet to adopt either platform. The results also show that 7.06 percent and 3.45 percent of Facebook and Twitter messages, respectively, are related to corporate disclosures. On average, users respond more quickly to disclosures released on Twitter (13 minutes) than on Facebook (25 minutes), whereas disclosures on Facebook have longer user engagement (427 minutes) than those on Twitter (10 minutes).

The emergence of social media as a corporate disclosure channel has caused significant changes in the production and dissemination of corporate information. This review identifies important themes in recent research on the impact of social media on the corporate information environment and provides suggestions for further explorations of this new but fast-growing area of research. Specifically, we first review the evolution of Internet-based corporate disclosure and related regulations, and then focus on three recent streams of research: 1) companies’ use of social media; 2) information produced by non-corporate users and its impact on capital markets; and 3) the credibility of corporate information on social media platforms.

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This study uses a sample of 1,316 firm-year observations of S&P 500 companies (2012–2016) to investigate whether and how social media (i.e., Twitter) affects firms' voluntary nonfinancial disclosure (i.e., corporate political disclosure). Our results show that Twitter-adopting firms are generally more transparent in their disclosure of corporate political contributions and of related policies and board oversight. Moreover, firms with more Twitter followers and firms whose corporate political activities are targeted in more Twitter messages are more transparent in such disclosures. Our cross-sectional analysis suggests that this effect is stronger for firms whose stakeholders are more active on Twitter and firms that are less visible or more reputable. Our results remain robust to different econometric model specifications and controlling for alternative social media platforms. Taken together, our findings suggest that social media (i.e., Twitter) presence exerts pressure on firms' voluntary nonfinancial disclosure practices (i.e., corporate political disclosure). JEL Classifications: G38; M41; M48. Data Availability: Data are available from the sources indicated in the text.