The Impact of Social Media Opinions on Innovation Investment: Evidence from Listed Firms in China

Wenping Zhang, Lele Kang, Qiqi Jiang, Lei Pei

Research output: Working paperResearch


Social media is a valuable knowledge source for firm innovation. Extending the literature of both social media and innovation management, we examine how the valence and volume of user-generated content (UGC) from social media influence firm innovation strategies. Based on analysis of 5-year panel data including 886 listed firms and their relevant 6.2 million microblogs, we observed three interesting findings. First, valence of UGC from social media has a U-shaped relation with firm innovation investments. In particular, compared with neutral UGC, both negative and positive contents are found to push firms to invest more in innovation. We found that such a curvilinear relation is mitigated with an increase in volume of UGC. Third, we verified that firm investment in innovation improves firm performance. These three findings have been examined using a series of strict robustness checks. Our study’s contribution to theory and practice is also discussed.
Original languageEnglish
PublisherSSRN: Social Science Research Network
Number of pages40
Publication statusPublished - 2017


  • Social media
  • Innovation investment
  • Valence
  • Volume
  • Firm performance

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