Lorin M. Hitt, Fujie Jin, Lynn Wu
Working Paper
Publication year: 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.