The double-edged sword effect of social media usage on new product development performance: evidence from Chinese firms

Purpose - Research on social media frequently analyze social media usage (SMU)'s positive consequences for organizations and individuals; however, recent innovation studies caution that SMU may not always lead to positive new product development (NPD) outcomes. The competing streams of research highlight a fundamental tension that exists in the social media literature exemplified by the question: Is SMU good or bad for NPD? In this manuscript, the authors suggest that a more appropriate question as follows: What are the positive and negative indirect effects of SMU on NPD performance? The purpose of this paper is to discuss the aforementioned points in detail. Design/methodology/approach - A literature review provides the model and hypotheses. Using a sample of 168 Chinese firms, the authors conducted an empirical test following multiple regression analysis. Findings - The results demonstrate that SMU facilitates business analytics (ability) and social legitimacy (opportunity) but impairs entrepreneurial proclivity (motivation). These three constructs in turn mediate the effect of SMU on NPD performance. Moreover, this paper explores how technological turbulence moderates SMU's effects on business analytics, entrepreneurship proclivity and social legitimacy. Research limitations/implications - The results may be affected by both the context (solely in China) and type (cross-sectional) of the data set. Future research might take a decompositional approach to study SMU's effect on innovation in different NPD stages. Furthermore, with widely varying purposes (e.g., marketing, information searching, partner collaboration, new product launch, etc.), there is certainly a need for more clarity and understanding of how firms can leverage each of these different social media activities for successful NPD. Practical implications - First, we suggest that managers in China should be explicitly aware of the double-edged sword effect of SMU on NPD performance. Second, this study encourages managers to use social media carefully when technological turbulence becomes intense. Originality/value - Drawing on the ability–motivation–opportunity framework, this is one of the first studies to simultaneously examines the benefits and costs of SMU for NPD. In addition, this paper bridges the separate literatures on social media, business analytics, entrepreneurial proclivity and social legitimacy and contributes to the NPD research.