Know Your Firm and Manage Social Media Engagement: Impact on Firm Sales Performance
MIS Quarterly
2 Pages Posted: 22 Apr 2017 Last revised: 5 May 2022
Date Written: June 29, 2020
Abstract
We examine the impact of firm social media engagement on sales performance and answer the “whether,” “what,” and “how” questions. The study used a quasi-experimental design in a social e-commerce setting, for which propensity score matching and difference-in-differences methods quantify a mean 20.67% sales increase after firm social media adoption. We also found that firms that sell low-involvement products benefit more from social media adoption than do those that sell high-involvement products. Further, in regard to how to manage social media engagement, we find that informative content in general is sales effective, especially for selling high-involvement products; whereas promotional content, a new type of content discovered in this study, is more beneficial for sales of low-involvement products. Meanwhile, more social media followers and more blog postings both generate greater firm sales performance. We use instrumental variables and control function method to address endogeneity issues and conduct robustness checks to support our conclusion. This study sheds light on the value of firm social media, particularly in regard to industry differences and firm know-how.
Keywords: firm social media, sales performance, product involvement, content analysis, quasi-experiment, propensity score matching, difference-in-differences, control function
JEL Classification: M
Suggested Citation: Suggested Citation