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Business performance and social media: Love or hate?

Jordi Paniagua () and Juan Sapena ()

Business Horizons, 2014, vol. 57, issue 6, 719-728

Abstract: The social media space has become a common place for communication, networking, and content sharing. Many companies seek marketing and business opportunities via these platforms. However, the link between resources generated from these sites and business performance remains largely unexploited. Both managers and financial advisors can profit from the lessons learned in this study. We conceptualize four channels by which social media impacts financial, operational, and corporate social performance: social capital, customers’ revealed preferences, social marketing, and social corporate networking. An empirical test of our framework shows that ‘followers’ and ‘likes’ positively influence a firm's share value, but only after a critical mass of followers is attained. Our estimates suggest that Twitter is a more powerful tool to enhance business performance than Facebook.

Keywords: Social media; Social networks; Twitter; Facebook; Business performance; Critical mass; User-generated content (search for similar items in EconPapers)
Date: 2014
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