Should firms invest in social commerce? An integrative perspective

Abstract

Integrating resource-based view and opportunity–motivation–ability framework, we theorize that social commerce represents firms’ opportunity to access valuable social media resources and gain a competitive advantage. We further argue that product uncertainty and firm reputation indicate firms’ motivation and ability, respectively, to use the social media resources, affecting the extent to which the competitive advantage can be realized. An event study of 275 social commerce initiatives announced between 2006 and 2011 supports our arguments, showing that social commerce increases firms’ stock returns, but such increases are more significant for firms selling products with high uncertainty and having high reputation.