Abstract

While Small and Medium Enterprises (SMEs) often face constraints of financial and IT resources, the recent emerging online social media could be a cost effective tool that allows SMEs to create two-way communications and connect with their customers. Yet, few studies have directed attention to the strategic use of online social media by SMEs. In this paper, we take the initial step to empirically examine the adoption and use of Facebook in SMEs. The results derived from our data analysis suggest that the adopting SMEs only start to see the positive effect on their sales revenue growth after a couple of years of persistent use of their Facebook platforms. Also, the engagement and interactions measured by posting activities from both a firm and its Facebook users have predictive effect on the building of an online community in terms of size.

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