Crossing borders with social media: Online social networks and FDI

Jordi Paniagua (), Pawel Korzynski and Alicia Mas-Tur

European Management Journal, 2017, vol. 35, issue 3, 314-326

Abstract: Social media is embedded in today's internationalization strategy. Companies extend their reach into foreign countries by posting and tweeting. Firms also enhance their mobile capabilities in foreign markets (e.g., knowledge and reputation) through user-generated content in online social networks. Levering on the capabilities-based theory of the multinational enterprise, this paper builds upon a resource-based, industry/network-based, and institution-based view framework. The study provides a comprehensive conceptual and empirical model to explain the effect of social networks on foreign direct investment. Empirical analysis in a global panel dataset of >4500 multinational enterprises suggests that online social networks' activity stimulates foreign capital expenditure and new affiliates. In addition, the article explores the relevance of customer capabilities along with sectoral and institutional moderating effects.

Keywords: Internalization theory; Capability-based view; Foreign direct investment; Networking technologies; Social media; Online social networks (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (17)

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DOI: 10.1016/j.emj.2016.09.002

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