Data Skills and Value of Social Media: Evidence from Large-Sample Firm Value Analysis

Despite the rapid adoption and increased spending on social media in the recent years, there is little existing research on the economic value of social media investment or the factors that affect this value. In this study, we first provide empirical evidence using a large sample of firm across industries to show firm market value is increasing in social media use, not just adoption. In addition, the value of social media investments are higher in firms that have a larger number of employees with data analytic skills (rather than just IT skills), and that this complementarity is increased when employees with data analytic skills are dispersed throughout the firm. Overall, these results suggest that value of social media for firms lies in its ability to facilitate the gathering and use of external data, and can be extracted more fully when a firm adjusts its human resource and organizational structure to facilitate data analysis and decision making.