A Firm's Activity in Social Media and Its Relationship with Corporate Reputation and Firm Performance

Abstract

There is growing debate about whether companies’ investments in social media really pay off. This research attempts to contribute to this discussion by investigating the relationship between a firm’s social media activity and two outcomes, namely, company reputation and firm financial performance. Two propositions are developed based on theory and tested with a sample of 59 companies. The findings suggest that a firm’s social media activity is only partially linked with its financial performance and is not linked with corporate reputation. The implications of the research suggest that little is known about the relationships between a firm’s social media activity and corporate reputation and financial outcomes.