Location
260-051, Owen G. Glenn Building
Start Date
12-15-2014
Description
How do firms’ social media efforts influence firm performance? Despite the increasing attention paid to the business value of social media, prior studies have not addressed this important question. This study theorizes and empirically examines how firm’s social media efforts-in terms of volume, information richness, and responsiveness-influence consumer behavior (engagement and attention) and firm performance. Using detailed data collected from Facebook pages of 63 firms over the 2010-2012 period, we find that information richness and responsiveness of a firm’s social media efforts are significantly associated with the firm’s market performance, captured by abnormal return and Tobin’s q. Interestingly, the volume of firm’s social media effort is not significantly associated with firm performance. Our study focuses on estimating financial returns to firms’ efforts on firm-initiated social media, thereby proffering a rationale for firms’ heavy investments in social media.
Recommended Citation
Chung, Sunghun; Animesh, Animesh; Han, Kunsoo; and Pinsonneault, Alain, "Firm’s Social Media Efforts, Consumer Behavior, and Firm Performance" (2014). ICIS 2014 Proceedings. 14.
https://aisel.aisnet.org/icis2014/proceedings/SocialMedia/14
Firm’s Social Media Efforts, Consumer Behavior, and Firm Performance
260-051, Owen G. Glenn Building
How do firms’ social media efforts influence firm performance? Despite the increasing attention paid to the business value of social media, prior studies have not addressed this important question. This study theorizes and empirically examines how firm’s social media efforts-in terms of volume, information richness, and responsiveness-influence consumer behavior (engagement and attention) and firm performance. Using detailed data collected from Facebook pages of 63 firms over the 2010-2012 period, we find that information richness and responsiveness of a firm’s social media efforts are significantly associated with the firm’s market performance, captured by abnormal return and Tobin’s q. Interestingly, the volume of firm’s social media effort is not significantly associated with firm performance. Our study focuses on estimating financial returns to firms’ efforts on firm-initiated social media, thereby proffering a rationale for firms’ heavy investments in social media.