Social media adoption and its impact on firm performance: the case of the UAE

Abstract

Purpose: Through social media technologies, small and medium-sized enterprises (SMEs) can communicate information and respond to competitors with minimal cost. The ability to share and access information can affect SMEs’ performance, but there is little research on the link between SMEs’ social media adoption and their performance. The purpose of this paper is to present a quantitative survey to explore factors that influenced social media adoption by SMEs in the United Arab Emirates (UAE), and its impact on performance. Design/methodology/approach: The study used a multi-perspective framework combining technological, organizational and environmental elements affecting SMEs. Survey questionnaires were used to collect data from a random sample of SMEs operating in the UAE. Using partial least squares and structural equation modeling techniques, 144 responses were analyzed. Findings: Social media adoption had no effect on SMEs’ performance. These findings could help managers and decision makers in the SME sector to try to keep pace with research on social media innovations, and enable them to benefit from social commerce as it becomes more ubiquitous. Research limitations/implications: This has implications for social media experts and anyone wishing to encourage social media use by SMEs. Originality/value: The study developed a suitable multi-perspective framework covering various factors that may affect social media use. It also tested the framework empirically on a sample of SMEs from the UAE.