Business Value of Social Media Technologies: Evidence from Online User Innovation Communities

John Qi Dong, Weifang Wu

Research output: Contribution to journalJournal articleResearchpeer-review


Social media technologies allow user-generated content and provide new opportunities and challenges for firms to transform their business. In particular, more and more firms have started strategically using the online user innovation communities (OUICs) for open innovation initiatives. The extent to which firms are able to derive business value from OUICs, however, has not been systematically examined. Drawing on a multi-theoretical foundation from the framework of dynamic capabilities and the view of innovation value chain, we conceptualize two OUIC-enabled capabilities, which are, ideation capability related to collecting user-generated ideas about potential innovation from OUIC, and implementation capability related to selecting user-generated ideas for innovation development and introducing developed innovation via OUIC. Using a large-scale panel data set consisting of 1676 firm-day observations from Dell and Starbucks, we examine the impacts of OUIC-enabled capabilities on firm value. We find robust evidence that OUIC-enabled ideation capability actually does not influence firm value, whereas OUIC-enabled implementation capability increases firm value. Novel theoretical and managerial implications are discussed.
Original languageEnglish
Article number1466
JournalJournal of Strategic Information Systems
Issue number2
Pages (from-to)113-127
Number of pages15
Publication statusPublished - Jun 2015
Externally publishedYes


  • Social media
  • Online user innovation communities
  • Information technology capabilities
  • Business value of information technology
  • Open innovation
  • Crowdsourcing

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