Social Media Presence and Organizational Performance: An Empirical Study on Companies’ Presence on Twitter

Abstract

Social media has garnered increased attention amongst individuals and organizations. At organizational levels, social media gives companies a way to connect with the market in a real-time manner. It becomes an essential component of marketing and business. However, the economic advantage of the presence of companies on social media platforms remains hardly studied. In this research, we focus on the economic relevance of being on social media, and more specifically on Twitter, at firm levels. With a sample of 227 Canadian companies listed on the Toronto Stock Exchange (TSX), we analyze the relationship between corporate performance and the company’s presence on Twitter. Our results suggest that companies can realize a competitive advantage in having social media presence. Indeed, companies that are active on Twitter stand out for their performance; either we measure corporate performance by stock market performance or by return on assets (ROA). Our results highlight the benefits of being active on social media.