IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v155y2023ipbs0148296322008888.html
   My bibliography  Save this article

Social media usage and entrepreneurial investment: An information-based view

Author

Listed:
  • Chen, Jiawen
  • Liu, Linlin

Abstract

This paper investigates how entrepreneurs’ social media use affects the entrepreneurial reinvestment of the ventures. Drawing on the information-based view of entrepreneurship, we propose that social media use has an inverted U-shaped relationship with entrepreneurial investment due to the competing forces of information gathering and information processing associated with social media use. This relationship will be more prominent in ventures that are newly founded or in high-tech industries. Our empirical findings based on a large sample of Chinese private firms confirm the core assertions. This study provides important insights into the complex consequences of social media use for entrepreneurship activities.

Suggested Citation

  • Chen, Jiawen & Liu, Linlin, 2023. "Social media usage and entrepreneurial investment: An information-based view," Journal of Business Research, Elsevier, vol. 155(PB).
    • Handle: RePEc:eee:jbrese:v:155:y:2023:i:pb:s0148296322008888
    DOI: 10.1016/j.jbusres.2022.113423
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296322008888
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2022.113423?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Smith, Claudia & Smith, J. Brock & Shaw, Eleanor, 2017. "Embracing digital networks: Entrepreneurs' social capital online," Journal of Business Venturing, Elsevier, vol. 32(1), pages 18-34.
    2. Mike Wright & Paul Westhead & Deniz Ucbasaran, 2009. "Information Search and Opportunity Identification:The Importance of Prior Business Ownership Experience," Post-Print hal-02312516, HAL.
    3. Ardichvili, Alexander & Cardozo, Richard & Ray, Sourav, 2003. "A theory of entrepreneurial opportunity identification and development," Journal of Business Venturing, Elsevier, vol. 18(1), pages 105-123, January.
    4. Kathleen M. Eisenhardt & Nathan R. Furr & Christopher B. Bingham, 2010. "CROSSROADS---Microfoundations of Performance: Balancing Efficiency and Flexibility in Dynamic Environments," Organization Science, INFORMS, vol. 21(6), pages 1263-1273, December.
    5. Wang, Wei & Liang, Qiaozhuan & Mahto, Raj V. & Deng, Wei & Zhang, Stephen X., 2020. "Entrepreneurial entry: The role of social media," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    6. Maw–Der Foo & Marilyn A. Uy & Charles Murnieks, 2015. "Beyond Affective Valence: Untangling Valence and Activation Influences on Opportunity Identification," Entrepreneurship Theory and Practice, , vol. 39(2), pages 407-431, March.
    7. Ye, Yu & Yu, Qionglei & Zheng, Yongjun & Zheng, Yi, 2022. "Investigating the effect of social media application on firm capabilities and performance: The perspective of dynamic capability view," Journal of Business Research, Elsevier, vol. 139(C), pages 510-519.
    8. Casson, Mark, 2005. "Entrepreneurship and the theory of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 327-348, October.
    9. Bach Nguyen, 2019. "Entrepreneurial Reinvestment: Local Governance, Ownership, and Financing Matter—Evidence from Vietnam," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(S2), pages 323-349, November.
    10. Qi Song & Yi Wang & Yang Chen & Jose Benitez & Jiang Hu, 2019. "Impact of the usage of social media in the workplace on team and employee performance," Post-Print hal-02159305, HAL.
    11. Bradley, Steven W. & Wiklund, Johan & Shepherd, Dean A., 2011. "Swinging a double-edged sword: The effect of slack on entrepreneurial management and growth," Journal of Business Venturing, Elsevier, vol. 26(5), pages 537-554, September.
    12. Nisar, Tahir M. & Prabhakar, Guru & Strakova, Lubica, 2019. "Social media information benefits, knowledge management and smart organizations," Journal of Business Research, Elsevier, vol. 94(C), pages 264-272.
    13. Unger, Jens M. & Rauch, Andreas & Frese, Michael & Rosenbusch, Nina, 2011. "Human capital and entrepreneurial success: A meta-analytical review," Journal of Business Venturing, Elsevier, vol. 26(3), pages 341-358, May.
    14. Sucheta Nadkarni & V. K. Narayanan, 2007. "Strategic schemas, strategic flexibility, and firm performance: the moderating role of industry clockspeed," Strategic Management Journal, Wiley Blackwell, vol. 28(3), pages 243-270, March.
    15. Brett R. Smith & Charles H. Matthews & Mark T. Schenkel, 2009. "Differences in Entrepreneurial Opportunities: The Role of Tacitness and Codification in Opportunity Identification," Journal of Small Business Management, Taylor & Francis Journals, vol. 47(1), pages 38-57, January.
    16. Carol C. Kuhlthau, 1991. "Inside the search process: Information seeking from the user's perspective," Journal of the American Society for Information Science, Association for Information Science & Technology, vol. 42(5), pages 361-371, June.
    17. Ruta Aidis & Saul Estrin & Tomasz Mickiewicz, 2012. "Size matters: entrepreneurial entry and government," Small Business Economics, Springer, vol. 39(1), pages 119-139, July.
    18. Gruber, Marc, 2007. "Uncovering the value of planning in new venture creation: A process and contingency perspective," Journal of Business Venturing, Elsevier, vol. 22(6), pages 782-807, November.
    19. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    20. J. P. Eggers & Sarah Kaplan, 2009. "Cognition and Renewal: Comparing CEO and Organizational Effects on Incumbent Adaptation to Technical Change," Organization Science, INFORMS, vol. 20(2), pages 461-477, April.
    21. James Hayton & Gaylen N. Chandler & Dawn R. DeTienne, 2011. "Entrepreneurial opportunity identification and new firm development processes: a comparison of family and non-family new ventures," International Journal of Entrepreneurship and Innovation Management, Inderscience Enterprises Ltd, vol. 13(1), pages 12-31.
    22. Alarcón-del-Amo, María-del-Carmen & Rialp-Criado, Alex & Rialp-Criado, Josep, 2018. "Examining the impact of managerial involvement with social media on exporting firm performance," International Business Review, Elsevier, vol. 27(2), pages 355-366.
    23. Paul M. Leonardi, 2014. "Social Media, Knowledge Sharing, and Innovation: Toward a Theory of Communication Visibility," Information Systems Research, INFORMS, vol. 25(4), pages 796-816, December.
    24. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, December.
    25. Fischer, Eileen & Reuber, A. Rebecca, 2011. "Social interaction via new social media: (How) can interactions on Twitter affect effectual thinking and behavior?," Journal of Business Venturing, Elsevier, vol. 26(1), pages 1-18, January.
    26. Simon Johnson & John McMillan & Christopher Woodruff, 2002. "Property Rights and Finance," American Economic Review, American Economic Association, vol. 92(5), pages 1335-1356, December.
    27. Cull, Robert & Xu, Lixin Colin, 2005. "Institutions, ownership, and finance: the determinants of profit reinvestment among Chinese firms," Journal of Financial Economics, Elsevier, vol. 77(1), pages 117-146, July.
    28. Olanrewaju, Abdus-Samad Temitope & Hossain, Mohammad Alamgir & Whiteside, Naomi & Mercieca, Paul, 2020. "Social media and entrepreneurship research: A literature review," International Journal of Information Management, Elsevier, vol. 50(C), pages 90-110.
    29. Howard Aldrich & Tiantian Yang, 2014. "How do entrepreneurs know what to do? learning and organizing in new ventures," Journal of Evolutionary Economics, Springer, vol. 24(1), pages 59-82, January.
    30. Ge, Jianhua & Stanley, Laura J. & Eddleston, Kimberly & Kellermanns, Franz W., 2017. "Institutional deterioration and entrepreneurial investment: The role of political connections," Journal of Business Venturing, Elsevier, vol. 32(4), pages 405-419.
    31. Drummond, Conor & O'Toole, Thomas & McGrath, Helen, 2022. "Social Media resourcing of an entrepreneurial firm network: Collaborative mobilisation processes," Journal of Business Research, Elsevier, vol. 145(C), pages 171-187.
    32. Liu, Xiaohui & Hodgkinson, Ian R. & Chuang, Fu-Mei, 2014. "Foreign competition, domestic knowledge base and innovation activities: Evidence from Chinese high-tech industries," Research Policy, Elsevier, vol. 43(2), pages 414-422.
    33. Scuotto, Veronica & Del Giudice, Manlio & Peruta, Maria Rosaria della & Tarba, Shlomo, 2017. "The performance implications of leveraging internal innovation through social media networks: An empirical verification of the smart fashion industry," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 184-194.
    34. Hervet, Guillaume & Guitart, Ivan A., 2022. "Increasing the effectiveness of display social media ads for startups: The role of different claims and executional characteristics," Journal of Business Research, Elsevier, vol. 153(C), pages 467-478.
    35. Vaghely, Ivan P. & Julien, Pierre-André, 2010. "Are opportunities recognized or constructed?: An information perspective on entrepreneurial opportunity identification," Journal of Business Venturing, Elsevier, vol. 25(1), pages 73-86, January.
    36. Martín-Rojas, Rodrigo & Garrido-Moreno, Aurora & García-Morales, Víctor J., 2020. "Fostering Corporate Entrepreneurship with the use of social media tools," Journal of Business Research, Elsevier, vol. 112(C), pages 396-412.
    37. Cooper, Arnold C. & Folta, Timothy B. & Woo, Carolyn, 1995. "Entrepreneurial information search," Journal of Business Venturing, Elsevier, vol. 10(2), pages 107-120, March.
    38. Delacroix, Eva & Parguel, Béatrice & Benoit-Moreau, Florence, 2019. "Digital subsistence entrepreneurs on Facebook," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 887-899.
    39. Danny Miller & Isabelle Le Breton–Miller, 2011. "Governance, Social Identity, and Entrepreneurial Orientation in Closely Held Public Companies," Entrepreneurship Theory and Practice, , vol. 35(5), pages 1051-1076, September.
    40. Ronald E. Rice, 1992. "Task Analyzability, Use of New Media, and Effectiveness: A Multi-Site Exploration of Media Richness," Organization Science, INFORMS, vol. 3(4), pages 475-500, November.
    41. 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.
    42. J. Michael Haynie & Dean A. Shepherd & Jeffery S. McMullen, 2009. "An Opportunity for Me? The Role of Resources in Opportunity Evaluation Decisions," Journal of Management Studies, Wiley Blackwell, vol. 46(3), pages 337-361, May.
    43. Theodore T. Allen & Zhenhuan Sui & Nathan L. Parker, 2017. "Timely Decision Analysis Enabled by Efficient Social Media Modeling," Decision Analysis, INFORMS, vol. 14(4), pages 250-260, December.
    44. Song, Michael & Wang, Tang & Parry, Mark E., 2010. "Do market information processes improve new venture performance?," Journal of Business Venturing, Elsevier, vol. 25(6), pages 556-568, November.
    45. Frese, Michael, 2009. "Towards a Psychology of Entrepreneurship — An Action Theory Perspective," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 5(6), pages 437-496, November.
    46. Foltean, Florin Sabin & Trif, Simona Mihaela & Tuleu, Daniela Liliana, 2019. "Customer relationship management capabilities and social media technology use: Consequences on firm performance," Journal of Business Research, Elsevier, vol. 104(C), pages 563-575.
    47. Yeganegi, Sepideh & Laplume, André O. & Dass, Parshotam, 2021. "The role of information availability: A longitudinal analysis of technology entrepreneurship," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    48. Giovanni Gavetti & Jan W. Rivkin, 2007. "On the Origin of Strategy: Action and Cognition over Time," Organization Science, INFORMS, vol. 18(3), pages 420-439, June.
    49. Zhou, Wubiao, 2017. "Institutional environment, public-private hybrid forms, and entrepreneurial reinvestment in a transition economy," Journal of Business Venturing, Elsevier, vol. 32(2), pages 197-214.
    50. Jackson, Thomas W. & Farzaneh, Pourya, 2012. "Theory-based model of factors affecting information overload," International Journal of Information Management, Elsevier, vol. 32(6), pages 523-532.
    51. Shalini Chandra & Anuragini Shirish & Shirish C. Srivastava, 2019. "Does technostress inhibit employee innovation? Examining the linear and curvilinear influence of technostress creators," Post-Print hal-02333209, HAL.
    52. James J. Chrisman & W. Ed Mcmullan, 2004. "Outsider Assistance as a Knowledge Resource for New Venture Survival," Journal of Small Business Management, Taylor & Francis Journals, vol. 42(3), pages 229-244, July.
    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. Nusrat, Anam & He, Yong & Luqman, Adeel & Mehrotra, Ankit & Shankar, Amit, 2023. "Unraveling the psychological and behavioral consequences of using enterprise social media (ESM) in mitigating the cyberslacking," Technological Forecasting and Social Change, Elsevier, vol. 196(C).

    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. Martín-Rojas, Rodrigo & Garrido-Moreno, Aurora & García-Morales, Víctor J., 2023. "Social media use, corporate entrepreneurship and organizational resilience: A recipe for SMEs success in a post-Covid scenario," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    2. Anna Long & Matthew S. Wood & Daniel L. Bennett, 2023. "Entrepreneurial organizing activities and nascent venture performance," Small Business Economics, Springer, vol. 60(2), pages 433-461, February.
    3. Nerine Mary George & Vinit Parida & Tom Lahti & Joakim Wincent, 2016. "A systematic literature review of entrepreneurial opportunity recognition: insights on influencing factors," International Entrepreneurship and Management Journal, Springer, vol. 12(2), pages 309-350, June.
    4. Razmdoost, Kamran & Alinaghian, Leila & Linder, Christian, 2020. "New venture formation: A capability configurational approach," Journal of Business Research, Elsevier, vol. 113(C), pages 290-302.
    5. Shepherd, Dean A. & Sattari, Rose & Patzelt, Holger, 2022. "A social model of opportunity development: Building and engaging communities of inquiry," Journal of Business Venturing, Elsevier, vol. 37(1).
    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. Weiqi Dai & Mingqing Liao, 2019. "Entrepreneurial attention to deregulations and reinvestments by private firms: Evidence from China," Asia Pacific Journal of Management, Springer, vol. 36(4), pages 1221-1250, December.
    8. Tischler, Joachim, 2014. "Characteristics of technological base, pace of technological development, and growth of young technology-based firms," EconStor Preprints 96156, ZBW - Leibniz Information Centre for Economics.
    9. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.
    10. Dai, Weiqi & Si, Steven, 2018. "Government policies and firms' entrepreneurial orientation: Strategic choice and institutional perspectives," Journal of Business Research, Elsevier, vol. 93(C), pages 23-36.
    11. Ganotakis, Panagiotis & Angelidou, Sofia & Saridakis, Charalampos & Piperopoulos, Panagiotis & Dindial, Miguel, 2023. "Innovation, digital technologies, and sales growth during exogenous shocks," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    12. Donbesuur, Francis & Boso, Nathaniel & Hultman, Magnus, 2020. "The effect of entrepreneurial orientation on new venture performance: Contingency roles of entrepreneurial actions," Journal of Business Research, Elsevier, vol. 118(C), pages 150-161.
    13. Ciaran Heavey & Zeki Simsek & Christina Kyprianou & Marten Risius, 2020. "How do strategic leaders engage with social media? A theoretical framework for research and practice," Strategic Management Journal, Wiley Blackwell, vol. 41(8), pages 1490-1527, August.
    14. Katrin M. Smolka & Ingrid Verheul & Katrin Burmeister–Lamp & Pursey P.M.A.R. Heugens, 2018. "Get it Together! Synergistic Effects of Causal and Effectual Decision–Making Logics on Venture Performance," Entrepreneurship Theory and Practice, , vol. 42(4), pages 571-604, July.
    15. Klyver, Kim & Steffens, Paul & Lomberg, Carina, 2020. "Having your cake and eating it too? A two-stage model of the impact of employment and parallel job search on hybrid nascent entrepreneurship," Journal of Business Venturing, Elsevier, vol. 35(5).
    16. Yeganegi, Sepideh & Laplume, André O. & Dass, Parshotam, 2021. "The role of information availability: A longitudinal analysis of technology entrepreneurship," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    17. Liu, Jingting & Zhu, Ying & Serapio, Manuel & Cavusgil, S. Tamer, 2019. "The new generation of millennial entrepreneurs: A review and call for research," International Business Review, Elsevier, vol. 28(5), pages 1-1.
    18. Shepherd, Dean A. & Majchrzak, Ann, 2022. "Machines augmenting entrepreneurs: Opportunities (and threats) at the Nexus of artificial intelligence and entrepreneurship," Journal of Business Venturing, Elsevier, vol. 37(4).
    19. Matthew R. Marvel & Justin L. Davis & Curtis R. Sproul, 2016. "Human Capital and Entrepreneurship Research: A Critical Review and Future Directions," Entrepreneurship Theory and Practice, , vol. 40(3), pages 599-626, May.
    20. Martin Hemmert & Adam R. Cross & Ying Cheng & Jae-Jin Kim & Masahiro Kotosaka & Franz Waldenberger & Leven J. Zheng, 2022. "New venture entrepreneurship and context in East Asia: a systematic literature review," Asian Business & Management, Palgrave Macmillan, vol. 21(5), pages 831-865, November.

    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:eee:jbrese:v:155:y:2023:i:pb:s0148296322008888. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    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.