Social Media Impact on Capital Markets


The globalization phenomenon has impacted the economy of many nations that have actively shifted into the digital era. This is the era where one can access his or her friends in any part of the world with just the tapping of a button on his or her computer or phone, among many other technological devices. This means that the transmission of important information like investment ideas has been made quite easy and fast (Viswanathan, 2013).

It has also emerged that many companies in different industries have turned to market through social networks. The main reason for the sudden change in marketing strategies for most business entities is the fact that social networks have large audiences globally, and they are one of the cheapest ways to deliver messages in the quest of harnessing larger market shares. It follows that social networks have a very great impact on the capital markets around the world (Castells, 2011). This paper presents a research proposal to look into the impact of social networks on capital markets.

Statement of Problem

There has been extensive use of social networks by local and international investors in the capital markets. Investors are receiving advice from experts about the best investment projects in the capital markets, and this has made an impact on the trends of business in the capital markets. There have been both negative and positive impacts associated with social networks with relations to the developments in the capital markets (Bollen, Mao & Zeng, 2011).

Proposed Study

The proposed study will look into the impact that social networks have had on the capital markets in the past several years. The study will assume a qualitative approach to establish the relationship between the two variables. The study findings will shed some light on whether social networks affect the capital markets. The findings will also distinguish between the advantages and limitations that social networks have on capital markets (Kaplan & Haenlein, 2010).

Scope of the Study

To investigate the impact of social networks on capital markets, we plan to pursue the following areas of inquiry:

  • Do social networks have any effects on the trends of business in the capital markets?
  • What are the positive impacts of social networks on capital markets?
  • What are the negative effects of social networks on the capital markets?
  • What are the available solutions and recommendations to solve the negative effects? (If any).


Our primary data sources will include interviews with some investors in the capital markets, surveys of various authentic websites and social networks, and observations of the trends of investments in the capital markets through various forms of media.

Our secondary sources will include articles or reports on capital markets business trends and the reports presented by investment analysts in the capital markets field. We will also consult articles dealing with the issue concerning social networks.

Qualifications of the Researcher

The researchers are college students who have an interest in why identifying the positive and negative impacts of social networks on the capital markets, and what can be done to eliminate the negative effects.


Social networks have caused both positive and negative impacts on the capital markets. The effects are a result of the fast and easy exchange of investment ideas among people from different parts of the world. The proposed research will use an in-depth approach toward highlighting the same. What is the impact of social networks on capital markets?


With your approval, along with any suggestions, we will continue our research.


Bollen, J., Mao, H., & Zeng, X. (2011). Twitter mood predicts the stock market. Journal of Computational Science, 2(1), 1-8.

Castells, M. (2011). The rise of the network society: The information age: Economy, society, and culture (Vol. 1). New York:

Kaplan, A. M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business horizons, 53(1), 59-68.

Viswanathan, B. (2013). Does Social Media affect Capital Markets? Forbes. Web.

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