Two essays on social media in organization

Abstract

The emergency of social media has brought out remarkable opportunities but also challenges in organizational management. This research studies the impact of social media on organizations by two essays. In essay one, a comprehensive literature review for social media research is conducted by social network-based bibliometric analysis and thematic analysis. In essay 2, to understand the impact of tremendous information from social media on firm performance, we employ the event study method to examine how social media-based external information environment impact the firm performance under negative events. Essay One: The increasing popularity of social media in the past decade has attracted the attention from many researchers to investigate its applications and implications for organizations, amassing a significant body of knowledge in the literature. To aid stakeholders to understand the latest development and discover research opportunities in social media research, Essay One of this research conducts a comprehensive literature study by using social network-based bibliometric analysis and thematic analysis. The analysis is based on 240 relevant top journal articles from a wide range of disciplines including operations management, information system management and marketing management etc. With our findings, we are able to chart the leaders in terms of authors, universities and regions in social media literature, identify the major research themes for each cluster developed, and come up with suggested research directions for stakeholders' future research or application endeavors. This essay contributes to social media research field by providing a research agenda and guiding stakeholders to develop innovative research plans. Essay Two: The suggested research directions proposed in Essay One indicate that the current literature examines social media mainly from an individual perspective and should be supplemented by studies adopting organizational or other perspectives; and that there is very limited attention paid to the roles of social media in helping organizations in dealing with negative events. Integrating these two suggested research directions, Essay Two investigates the impact of social media on firms' financial returns under corporate social irresponsibility (CSI) events. We adopt the three-factor Fama-French factors to calculate the abnormal stock returns of 1032 CSI events for 305 Chinese manufacturing firms with a three-day ([-1,1]) event window. Then, a firm fixed-effect regression is conducted to examine the impact of social media-based investor sentiment on firms' abnormal stock return. Moreover, by applying the heterogeneity test, we find the magnitude of such an impact varies over different levels of corporate intangible asset intensity, advertising intensity, board independence and forms of equity nature (whether it is a state-owned enterprise). This research offers insights in understanding the impact of social media information on firm performance under the corporate social irresponsibility events and the interaction effect between the internal management and external information environment under negative events.