38 Pages Posted: 22 Aug 2016
Date Written: August 18, 2016
Despite the rapid adoption of and increased spending on social media in the recent years, there is little existing research on the economic value of corporate social media investment or the factors that affect this value. In this study, we first provide empirical evidence using a large sample of firms across industries to show that firm market value increases with active social media usage, not just adoption. However, the return on using social media depends on having a larger number of employees with data analytics skills (rather than just IT skills), and this complementarity is increased if employees with data analytics skills are dispersed throughout the firm. Overall, these results suggest that the value of social media for firms lies in the firm’s ability to facilitate the gathering and use of external data, and that the use of social media becomes more valuable if a firm adjusts its human resource and organizational structure to facilitate data analysis and decision making.
Keywords: Social Media, Data Analytics, Skills, Market Value, Complementarities
Suggested Citation: Suggested Citation
Hitt, Lorin M. and Jin, Fujie and Wu, Lynn, Data Analytics Skills and the Corporate Value of Social Media (August 18, 2016). Kelley School of Business Research Paper No. 16-61. Available at SSRN: https://ssrn.com/abstract=2826115 or http://dx.doi.org/10.2139/ssrn.2826115