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Let the user speak: Is feedback on Facebook a source of firms’ innovation?


Bertschek, Irene; Kesler, Reinhold (2022). Let the user speak: Is feedback on Facebook a source of firms’ innovation? Information Economics and Policy, 60:100991.

Abstract

Social media open up new possibilities for firms to exploit information from various external sources. Does this information help firms to become more innovative? Combining firm-level survey data with information from firms’ Facebook pages, we study the role that firms’ and users’ activities on Facebook play in the innovation process. We find that firms’ adoption of a Facebook page as well as feedback from users are positively and significantly related to product innovations. Our results withstand a large set of robustness checks, including estimations that take potential endogeneity of firms’ Facebook use as well as unobserved heterogeneity into account. Analyzing the content of firm posts and user comments reveals that Facebook adoption is only correlated with product innovations if firms and users actively participate in a discussion, especially when engagement is above-average and comes from both sides.

Abstract

Social media open up new possibilities for firms to exploit information from various external sources. Does this information help firms to become more innovative? Combining firm-level survey data with information from firms’ Facebook pages, we study the role that firms’ and users’ activities on Facebook play in the innovation process. We find that firms’ adoption of a Facebook page as well as feedback from users are positively and significantly related to product innovations. Our results withstand a large set of robustness checks, including estimations that take potential endogeneity of firms’ Facebook use as well as unobserved heterogeneity into account. Analyzing the content of firm posts and user comments reveals that Facebook adoption is only correlated with product innovations if firms and users actively participate in a discussion, especially when engagement is above-average and comes from both sides.

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5 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Physical Sciences > Management, Monitoring, Policy and Law
Uncontrolled Keywords:Social media, Open innovation, Feedback, Product innovation
Scope:Discipline-based scholarship (basic research)
Language:English
Date:2022
Deposited On:09 Mar 2023 14:40
Last Modified:28 Jun 2024 01:43
Publisher:Elsevier
ISSN:0167-6245
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.infoecopol.2022.100991
Official URL:https://www.sciencedirect.com/science/article/pii/S0167624522000300
Other Identification Number:merlin-id:23460