Social networks and financial outcomes

06 Oct 2017

Academic research on whether social networks influence financial outcomes is still undeveloped. The literature has typically focused on three major questions — whether social networks affect investor behavior, firm behavior, or intermediary behavior. Because the theoretical framework in finance is organized around an accepted set of paradigms, and because data on intermediaries and firms have been publicly available for a long time, the financial economics area has just started using big data in its analysis. This note describes the extant research in this area and outlines how the field is likely to evolve.