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.
|Publisher||SSRN: Social Science Research Network|
|Number of pages||40|
|Publication status||Published - 2017|
- Social media
- Innovation investment
- Firm performance