Panic bank runs, global market contagion and the financial consequences of social media

Dosumu, Oluwatoyin Esther; Sakariyahu, Rilwan; Oyekola, Olayinka; Lawal, Rodiat

Abstract

This paper provides empirical analysis on how social media amplifies bank runs, using the recent bank turmoil in the US. Employing data for 94 countries, our findings show that social media provides a conduit through which an immediate negative and significant impact of the bank crisis transmits across global investor sentiments and market outcomes. The results also indicate a significant spill-over influence of the turmoil on European and G7 economies, while there appears to be no significant impact on major markets in Asia and Africa.

Citation

Dosumu, O. E., Sakariyahu, R., Oyekola, O., & Lawal, R. (2023). Panic bank runs, global market contagion and the financial consequences of social media. Economics Letters, 228, Article 111170. https://doi.org/10.1016/j.econlet.2023.111170

• Journal Article Type: Article
• Acceptance Date: May 11, 2023
• Online Publication Date: May 16, 2023
• Publication Date: 2023-07
• Deposit Date: May 30, 2023
• Publicly Available Date: May 30, 2023
• Journal: Economics Letters
• Print ISSN: 0165-1765
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 228
• Article Number: 111170
• DOI: https://doi.org/10.1016/j.econlet.2023.111170
• Keywords: Bank run, Investor sentiment, Global markets, Social media, Contagion