A contest between users and marketers? The economic value of social media content for adverse events

The rapid dissemination of information on social media may bring potential risks to companies. However, the current discussions about the impact of social media are inadequate. This study aims to examine the moderating effect of social media content on investors' risk perception for a firm's stock value in the presence of adverse events. We collected user-generated content and marketer-generated content on Facebook from January 2010 to November 2016 related to 45 publicized adverse events pertaining to 8 publicly traded catering companies. The empirical results suggest that user-generated content and marketer-generated content moderates the impact of adverse events on investors' risk perception varying with its textual features, communication modes, and legitimacy driven by confirmation bias. This study highlights the importance of social media content management to adverse events and provides a foray into a better understanding of the economic value of social media content.