Consumer Sentiment and Stock Market Reactions: The Role of Social Media Marketing

Abstract

Interpersonal behavior changes have come about as a result of introduction of digital way of conducting interpersonal communication. Social media marketing effect on investor attitudes and stock market performance in emerging markets like India have been greater than that on consumer behavior and associations. This proposed research will involve the relationship that exists between stock market performance and consumers sentiments. The research seeks to determine the role of social media marketing in the current relationship, focusing especially on India. The study aims at analyzing the effect of consumer sentiments on stock market performance using signaling theory, behavioral finance and sentiments theories. The quantitative approach will be adopted to undertake this research. Respondents, involving consumers well informed about the stock market, investors and stakeholders in stock market, totaling 489 from various cities in India, will be sampled to collect data. Structural equation modeling method will be used to test for mediation. Results show that social media marketing is a mediator in the relationship between consumer sentiments and stock market response. Positive consumer sentiments affect trading, investor sentiment and stock market performance and vice versa.