IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v12y2020i24p10616-d464772.html
   My bibliography  Save this article

Social Media Adoption and Financial Sustainability: Learned Lessons from Developing Countries

Author

Listed:
  • Raza Ur Rahman

    (Institute of Business Studies and Leadership, Abdul Wali Khan University, Garden Campus, Mardan 23200, Pakistan)

  • Syed Mohsin Ali Shah

    (Institute of Business Studies and Leadership, Abdul Wali Khan University, Garden Campus, Mardan 23200, Pakistan)

  • Hatem El-Gohary

    (College of Business & Economics, Qatar University, Doha 2713, Qatar)

  • Muzaffar Abbas

    (Community College, Prince Sattam Bin Abdulaziz University, Alkharj Campus, Alkharj 11942, Saudi Arabia)

  • Syed Haider Khalil

    (Institute of Business Studies and Leadership, Abdul Wali Khan University, Garden Campus, Mardan 23200, Pakistan)

  • Saad Al Altheeb

    (Community College, Prince Sattam Bin Abdulaziz University, Alkharj Campus, Alkharj 11942, Saudi Arabia)

  • Fahad Sultan

    (Institute of Business Studies and Leadership, Abdul Wali Khan University, Garden Campus, Mardan 23200, Pakistan)

Abstract

Social Media (SM) is considered one of the most discussed topics in today’s business environment, mostly because of the recent developments and improvements in computer and ICT (Information and Communications Technology) technologies. However, very little is known about Social Media’s (SM) role in creating Small and Medium-sized Enterprises’ (SMEs’) financial sustainability. Drawing upon the Technology Organisational and Environmental (TOE) framework, the authors constructed a comprehensive model that examined the role of different factors in the adoption of SM by SMEs in developing countries (using Pakistan as an example). Using a questionnaire survey of 383 owners/managers of SMEs in Pakistan, the research findings determined the different factors (i.e., organisational, technological, and environmental), which can impact the adoption of SM by SMEs. In line with previous research studies, the results of structural equation modelling show that technological factors such as perceived benefits of SM, compatibility of SM, cost, and trust have a substantial effect on SMEs’ SM adoption. Similarly, both organisational factors: top management support and technological competence, are strong predictors of SM adoption in SMEs. Finally, environmental factors (i.e., competitor pressure, customer pressure, and information intensity) positively impacted SM adoption by SMEs. The effect of SM adoption on SMEs’ financial sustainability was also tested and found to be positive and significant. Several theoretical and practical implications for owners/managers and other stakeholders regarding SM’s successful implementation by SMEs are highlighted within the paper.

Suggested Citation

  • Raza Ur Rahman & Syed Mohsin Ali Shah & Hatem El-Gohary & Muzaffar Abbas & Syed Haider Khalil & Saad Al Altheeb & Fahad Sultan, 2020. "Social Media Adoption and Financial Sustainability: Learned Lessons from Developing Countries," Sustainability, MDPI, vol. 12(24), pages 1-26, December.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:24:p:10616-:d:464772
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/12/24/10616/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/12/24/10616/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stijn Claessens & Neeltje van Horen, 2015. "The Impact of the Global Financial Crisis on Banking Globalization," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 63(4), pages 868-918, November.
    2. El-Gohary, Hatem, 2012. "Factors affecting E-Marketing adoption and implementation in tourism firms: An empirical investigation of Egyptian small tourism organisations," Tourism Management, Elsevier, vol. 33(5), pages 1256-1269.
    3. Piller, Frank & Vossen, Alexander & Ihl, Christoph, 2012. "From Social Media to Social Product Development: The Impact of Social Media on Co-Creation of Innovation," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 66(1), pages 7-27.
    4. Muhammad Shujaat Mubarik & Evelyn S. Devadason & Chandran Govindaraju, 2020. "Human capital and export performance of small and medium enterprises in Pakistan," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 47(5), pages 643-662, May.
    5. Zu, Xu & Diao, Xinyi & Meng, Zhiyi, 2019. "The impact of social media input intensity on firm performance: Evidence from Sina Weibo," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 536(C).
    6. Rajagopal, 2014. "The Human Factors," Palgrave Macmillan Books, in: Architecting Enterprise, chapter 9, pages 225-249, Palgrave Macmillan.
    7. Viswanath Venkatesh, 2000. "Determinants of Perceived Ease of Use: Integrating Control, Intrinsic Motivation, and Emotion into the Technology Acceptance Model," Information Systems Research, INFORMS, vol. 11(4), pages 342-365, December.
    8. Bala Subrahmanya, M. H. & Mathirajan, M. & Krishnaswamy, K. N., 2010. "Importance of Technological Innovation for SME Growth - Evidence from India," MERIT Working Papers 007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Trainor, Kevin J. & Andzulis, James (Mick) & Rapp, Adam & Agnihotri, Raj, 2014. "Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM," Journal of Business Research, Elsevier, vol. 67(6), pages 1201-1208.
    10. Oluwasola Oni & Anastasia Papazafeiropoulou, 2014. "Diverse views on IT innovation diffusion among SMEs: Influencing factors of broadband adoption," Information Systems Frontiers, Springer, vol. 16(4), pages 729-747, September.
    11. Paniagua, Jordi & Sapena, Juan, 2014. "Business performance and social media: Love or hate?," Business Horizons, Elsevier, vol. 57(6), pages 719-728.
    12. Jianmu Ye & KMMCB Kulathunga, 2019. "How Does Financial Literacy Promote Sustainability in SMEs? A Developing Country Perspective," Sustainability, MDPI, vol. 11(10), pages 1-21, May.
    13. Adriana Burlea-Schiopoiu & Laurentiu Stelian Mihai, 2019. "An Integrated Framework on the Sustainability of SMEs," Sustainability, MDPI, vol. 11(21), pages 1-22, October.
    14. Payal S. Kapoor & K.R. Jayasimha & Ashish Sadh, 2013. "Brand-related, Consumer to Consumer, Communication via Social Media," IIM Kozhikode Society & Management Review, , vol. 2(1), pages 43-59, January.
    15. Bala Subrahmanya, M. H. & Mathirajan, M. & Krishnaswamy, K. N., 2010. "Importance of Technological Innovation for SME Growth - Evidence from India," MERIT Working Papers 2010-007, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    16. Nyankomo Marwa & Meshach Aziakpono, 2015. "Financial sustainability of Tanzanian saving and credit cooperatives," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 42(10), pages 870-887, October.
    17. Ada Scupola, 2003. "The Adoption of Internet Commerce by SMEs in the South of Italy: An Environmental, Technological and Organizational Perspective," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 6(1), pages 52-71, January.
    18. Kaplan, Andreas M. & Haenlein, Michael, 2010. "Users of the world, unite! The challenges and opportunities of Social Media," Business Horizons, Elsevier, vol. 53(1), pages 59-68, January.
    19. Mansour Naser Alraja & Sarfraz Fayaz Khan & Basel Khashab & Raghad Aldaas, 2020. "Does Facebook Commerce Enhance SMEs Performance? A Structural Equation Analysis of Omani SMEs," SAGE Open, , vol. 10(1), pages 21582440199, January.
    20. Muhammad Shujaat Mubarik & V. G. R. Chandran & Evelyn S. Devadason, 2018. "Measuring Human Capital in Small and Medium Manufacturing Enterprises: What Matters?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(2), pages 605-623, June.
    21. Premkumar, G. & Roberts, Margaret, 1999. "Adoption of new information technologies in rural small businesses," Omega, Elsevier, vol. 27(4), pages 467-484, August.
    22. Luo, Yadong & Bu, Juan, 2016. "How valuable is information and communication technology? A study of emerging economy enterprises," Journal of World Business, Elsevier, vol. 51(2), pages 200-211.
    23. Stijn Claessens & Neeltje van Horen, 2015. "The Impact of the Global Financial Crisis on Banking Globalization," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 63(4), pages 868-918, November.
    24. Wang, Yi-Shun & Li, Hsien-Ta & Li, Ci-Rong & Zhang, Ding-Zhong, 2016. "Factors affecting hotels' adoption of mobile reservation systems: A technology-organization-environment framework," Tourism Management, Elsevier, vol. 53(C), pages 163-172.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jacques Simon Song & Hervé William Mougnol A Ekoula & Georges Ngnouwal Eloundou, 2024. "Alcohol consumption in developing countries: Does information and communication technology (ICT) diffusion matter?," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(2), pages 1210-1240, March.
    2. Emmanuel Bruce & Zhao Shurong & Sulemana Bankuoru Egala & John Amoah & Du Ying & Huang Rui & Tai Lyu, 2022. "Social Media Usage and SME Firms’ Sustainability: An Introspective Analysis from Ghana," Sustainability, MDPI, vol. 14(15), pages 1-17, August.
    3. Ammar AL-Ashmori & P. D. D. Dominic & Narinderjit Singh Sawaran Singh, 2022. "Items and Constructs of Blockchain Adoption in Software Development Industry: Experts Perspective," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    4. Vera Gelashvili & Juan Gabriel Martínez-Navalón & Miguel Ángel Gómez-Borja, 2024. "Does the intensity of use of social media influence the economic sustainability of the university?," The Journal of Technology Transfer, Springer, vol. 49(1), pages 19-43, February.
    5. Ammar AL-Ashmori & Shuib Bin Basri & P. D. D. Dominic & Luiz Fernando Capretz & Amgad Muneer & Abdullateef Oluwagbemiga Balogun & Abdul Rehman Gilal & Rao Faizan Ali, 2022. "Classifications of Sustainable Factors in Blockchain Adoption: A Literature Review and Bibliometric Analysis," Sustainability, MDPI, vol. 14(9), pages 1-30, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abou-Shouk, Mohamed A. & Lim, Wai Mun & Megicks, Phil, 2016. "Using competing models to evaluate the role of environmental pressures in ecommerce adoption by small and medium sized travel agents in a developing country," Tourism Management, Elsevier, vol. 52(C), pages 327-339.
    2. Marjeta Marolt & Hans-Dieter Zimmermann & Andreja Pucihar, 2022. "Social Media Use and Business Performance in SMEs: The Mediating Roles of Relational Social Commerce Capability and Competitive Advantage," Sustainability, MDPI, vol. 14(22), pages 1-14, November.
    3. Amoah John & Nutakor Felix & Li Jinke & Jibril Abdul Bashiru & Sanful Benjamin & Odei Michael Amponsah, 2021. "Antecedents of social media usage intensity in the financial sector of an emerging economy: a Pls-Sem Algorithm," Management & Marketing, Sciendo, vol. 16(4), pages 387-406, December.
    4. Fosso Wamba, Samuel & Bhattacharya, Mithu & Trinchera, Laura & Ngai, Eric W.T., 2017. "Role of intrinsic and extrinsic factors in user social media acceptance within workspace: Assessing unobserved heterogeneity," International Journal of Information Management, Elsevier, vol. 37(2), pages 1-13.
    5. Dr. Arif Anjum, 2018. "Impact of Technology Adoption on the Performance of Small and Medium Enterprises in India," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 857-867:5.
    6. Liu, Zhenyuan & Geng, Ruoqi & Tse, Ying Kei (Mike) & Han, Shuihua, 2023. "Mapping the relationship between social media usage and organizational performance: A meta-analysis," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    7. Wu He & Feng-Kwei Wang, 2016. "A process-based framework of using social media to support innovation process," Information Technology and Management, Springer, vol. 17(3), pages 263-277, September.
    8. Paniagua, Jordi & Korzynski, Pawel & Mas-Tur, Alicia, 2017. "Crossing borders with social media: Online social networks and FDI," European Management Journal, Elsevier, vol. 35(3), pages 314-326.
    9. Jiwoo Jung & Eunkyung Park & Joonho Moon & Won Seok Lee, 2021. "Exploration of Sharing Accommodation Platform Airbnb Using an Extended Technology Acceptance Model," Sustainability, MDPI, vol. 13(3), pages 1-16, January.
    10. Sikandar Ali Qalati & Dragana Ostic & Mohammad Ali Bait Ali Sulaiman & Aamir Ali Gopang & Asadullah Khan, 2022. "Social Media and SMEs’ Performance in Developing Countries: Effects of Technological-Organizational-Environmental Factors on the Adoption of Social Media," SAGE Open, , vol. 12(2), pages 21582440221, May.
    11. Zhang, Feng & Zhu, Lei, 2021. "Social media strategic capability, organizational unlearning, and disruptive innovation of SMEs: The moderating roles of TMT heterogeneity and environmental dynamism," Journal of Business Research, Elsevier, vol. 133(C), pages 183-193.
    12. Alice Mazzucchelli & Roberto Chierici & Angelo Di Gregorio & Claudio Chiacchierini, 2021. "Is Facebook an effective tool to access foreign markets? Evidence from international export performance of fashion firms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(4), pages 1107-1144, December.
    13. Viswanathan Nagarajan & Prateek Sharma, 2021. "Firm internationalization and long‐term impact of the Covid‐19 pandemic," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1477-1491, September.
    14. Nicole D. Sintov & P. Wesley Schultz, 2017. "Adjustable Green Defaults Can Help Make Smart Homes More Sustainable," Sustainability, MDPI, vol. 9(4), pages 1-12, April.
    15. Svetlana Andrianova & Badi H. Baltagi & Panicos Demetriades & David Fielding, 2017. "Ethnic Fractionalization, Governance and Loan Defaults in Africa," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(4), pages 435-462, August.
    16. Marcel Rosenberger & Christiane Lehrer & Reinhard Jung, 0. "Integrating data from user activities of social networks into public administrations," Information Systems Frontiers, Springer, vol. 0, pages 1-14.
    17. Jérôme Vandenbussche & Piyabha Kongsamut & Dilyana Dimova, 2018. "Macroprudential Policy Effectiveness: Lessons from Southeastern Europe," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(9), pages 60-102, May.
    18. Bilgihan, Anil & Barreda, Albert & Okumus, Fevzi & Nusair, Khaldoon, 2016. "Consumer perception of knowledge-sharing in travel-related Online Social Networks," Tourism Management, Elsevier, vol. 52(C), pages 287-296.
    19. Fernando Ubeda & Alvaro Mendez & Francisco Javier Forcadell, 2024. "Sustainable banking and trust in the global South," Global Policy, London School of Economics and Political Science, vol. 15(S1), pages 34-44, March.
    20. Kočenda, Evžen & Iwasaki, Ichiro, 2020. "Bank survival in Central and Eastern Europe," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 860-878.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:12:y:2020:i:24:p:10616-:d:464772. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.