A firm's activity in social media and its relationship with corporate reputation, firm size and firm performance
The significance of social media has increased greatly in the past few years, leading
companies to increase their social media activity and also increase their interest in
knowing whether it is genuinely worth being active on social media, including knowing
the potential advantages.
This study aims to examine the relationship between social media activity and three
variables: reputation, firm size and firm performance. The study analyzes the
relationships between the constructs but does not propose or discuss the direction, that
is, the causal linkages, between the variables.
The type of research conducted for this study is quantitative research; it is based on
data that are collected from companies’ social media channels. The selected channels for
this research are Facebook, Twitter, LinkedIn and YouTube. The data on corporate
reputation are collected from secondary sources and are based on a survey of Finnish
companies’ reputations and responsibilities, implemented by a company called TNS
Gallup. The data for firm performance and firm size are collected from companies’
annual reports. The dependencies between different variables are examined by using the
correlation analysis in IBM SPSS version 22.
The results of this study suggest that there is no relationship between social media
activity and corporate reputation. Therefore, it cannot be demonstrated that companies
that are active on social media have better or worse reputations than those of companies
that are not. However, a partial relationship is found between social media activity and
firm performance.
This research gives a good argument for the case that merely being active in
different social media channels is not sufficient to enhance corporate reputation or
financial performance. Even companies that are active on social media do not necessarily
inherently experience positive reputations or healthy financial performance.
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