Social Media Presence and Organizational Performance: An Empirical Study on Companies’ Presence on Twitter

  • Nivo Ravaonorohanta University of Sherbrooke
  • Michel Sayumwe University of Quebec at Montreal
Keywords: Social Media, Presence on Twitter, Tweets, Financial performance, Operating performance, Governance mechanism, Transparency, Legitimacy

Abstract

Social media has garnered increased attention amongst individuals and organizations. At organizational levels, social media gives companies a way to connect with the market in a real-time manner. It becomes an essential component of marketing and business. However, the economic advantage of the presence of companies on social media platforms remains hardly studied. In this research, we focus on the economic relevance of being on social media, and more specifically on Twitter, at firm levels. With a sample of 227 Canadian companies listed on the Toronto Stock Exchange (TSX), we analyze the relationship between corporate performance and the company’s presence on Twitter. Our results suggest that companies can realize a competitive advantage in having social media presence. Indeed, companies that are active on Twitter stand out for their performance; either we measure corporate performance by stock market performance or by return on assets (ROA). Our results highlight the benefits of being active on social media.

Author Biographies

Nivo Ravaonorohanta, University of Sherbrooke
Dr. Nivo Ravaonorohanta has a PhD in Accounting and currently works at University of Sherbrooke. Her primary research interests are in the fields of corporate governance, the quality of financial and non-financial information disclosures, and the links between corporate disclosures and performance. She pays particular attention to discretionary narrative disclosures, examines if those are used for impression management rather than incremental information purposes, and assesses its relevance to stakeholders. She has developed a high degree of expertise in mergers and acquisitions.
Michel Sayumwe, University of Quebec at Montreal
Dr. Michel Sayumwe holds a Ph.D. in accounting from HEC Montréal. He is an Associate Professor at the Department of Accounting Studies at the University of Quebec at Montreal. His research interests relate primarily to the quality of international accounting standardization by making the link with the governance of listed companies. In particular, it analyzes the theoretical aspects linked to business combinations and political connections. Finally, in the context of economic globalization, he studies questions related to the integration of foreign accounting professionals in another country with a culture different from that of their country of origin.
Published
2020-07-31
How to Cite
Ravaonorohanta, N., & Sayumwe, M. (2020). Social Media Presence and Organizational Performance: An Empirical Study on Companies’ Presence on Twitter. Contemporary Management Research, 16(2), 123-144. https://doi.org/10.7903/cmr.20095
Section
Application and impact of advanced IT/IS/Internet in business management