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

See all articles by Fei Ren

Fei Ren

Peking University - Guanghua School of Management

Yong Tan

University of Washington - Michael G. Foster School of Business

Fei Wan

Shanghai International Studies University - School of Business and Management

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

Ren, Fei and Tan, Yong and Wan, Fei, Know Your Firm and Manage Social Media Engagement: Impact on Firm Sales Performance (June 29, 2020). MIS Quarterly, Available at SSRN: https://ssrn.com/abstract=2956420 or http://dx.doi.org/10.2139/ssrn.2956420

Fei Ren

Peking University - Guanghua School of Management ( email )

Peking University
Beijing, Beijing 100871
China

Yong Tan

University of Washington - Michael G. Foster School of Business ( email )

Box 353226
Seattle, WA 98195-3226
United States

Fei Wan (Contact Author)

Shanghai International Studies University - School of Business and Management ( email )

1550 Wen Xiang Rd.
Songjiang District
Shanghai, Shanghai 201620
China

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