Comparative effect of company-driven SNS activity vs. consumer-driven SNS activity on firm value: Evidence from facebook

As mobile technology and social media have advanced, companies have become more and more motivated to make use of social network services (SNS) such as Facebook to increase future firm performance. Perusing the literature on the association between SNS and firm performance, we found very few empirical studies of the comparative effect of company-driven activity (e.g. posting) and consumer-driven activity (e.g. liking, commenting, sharing) on firm performance. Moreover, specific SNS activities affecting firm performance in the present, future, or both have not been explicitly identified. Hence, we developed an empirical model to identify and find differences between the effects of SNS activities on firm performance in the present (as measured by returns on investment) or future (as measured by Tobin's q) to improve our understanding of the impact of corporate SNS as a marketing channel. Text mining techniques are applied in this study to identify SNS activities from SNS data. The results suggest that SNS contributes significantly to future firm performance, as evidenced by increases in Tobin's q. Moreover, company-driven activities affect future value, while consumer-driven activities affect present value. Implications from these results are discussed.