The effect of the use of social media and dynamic capabilities on market performance of micro, small and medium-sized firms

Abstract

Objective: This article analyzes the impact of the relationship between the use of social media, dynamic capabilities, and market performance on companies, as well as the mediating role of dynamic capabilities in the relationship between the use of social media and market performance.

Method: We adopted a quantitative and descriptive methodology, and collected data through a survey, with a sample of 143 companies. We carried out factor analysis by using the SPSS® software, and structural equation modeling by using the AMOS® software.

Originality/Relevance: This study deepens the understanding of the role of social media in turbulent environments, and its relationship with dynamic capabilities and market performance in micro, small and medium-sized companies.

Results: The hypotheses were tested and showed a positive effect of the use of social media on dynamic capabilities, as well as of the use of social media on market performance. However, dynamic capabilities did not mediate the relationship between the use of social media and market performance.

Theoretical/methodological contributions: The results contribute to science by highlighting the role of social media in turbulent environments, and its relationship with dynamic capabilities and market performance in micro, small and medium-sized companies. They also contribute theoretically and empirically by identifying factors that allow maximizing organizations’ productivity.

Social/management contributions: The biggest challenge for managers of micro, small and medium-sized firms is to turn social media data into valuable personal insights, since exploiting these insights to add value is the biggest barrier for these companies.