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Social Media Communication and Company Value: The Moderating Role of Industry Competitiveness

Social Media Communication and Company Value: The Moderating Role of Industry Competitiveness Existing research demonstrates that industry competitiveness influences the effectiveness of marketing actions. However, limited scholarly attention has been paid to how service companies should communicate on social media under different levels of industry competitiveness. The current research seeks to address this gap in the literature by analyzing social media communication, brand impression, and financial data from two large samples of service companies and by employing state-of-the-art methods of machine learning. Study 1 demonstrates that industry competitiveness positively (negatively) moderates the impact of persuasive tone (volume) of social media communications on company value. We argue that these effects stem from investors’ expectations about the impact of these communication styles in facilitating differentiation and improving brand impressions in a congested competitive environment. Consistent with this mechanism, Study 2 reveals that as an industry becomes more cluttered, persuasive tone (volume) becomes more (less) effective in impacting consumers’ brand impressions. The findings provide important insights for service companies that operate under different levels of industry competitiveness. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Service Research SAGE

Social Media Communication and Company Value: The Moderating Role of Industry Competitiveness

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References (60)

Publisher
SAGE
Copyright
© The Author(s) 2022
ISSN
1094-6705
eISSN
1552-7379
DOI
10.1177/10946705211072429
Publisher site
See Article on Publisher Site

Abstract

Existing research demonstrates that industry competitiveness influences the effectiveness of marketing actions. However, limited scholarly attention has been paid to how service companies should communicate on social media under different levels of industry competitiveness. The current research seeks to address this gap in the literature by analyzing social media communication, brand impression, and financial data from two large samples of service companies and by employing state-of-the-art methods of machine learning. Study 1 demonstrates that industry competitiveness positively (negatively) moderates the impact of persuasive tone (volume) of social media communications on company value. We argue that these effects stem from investors’ expectations about the impact of these communication styles in facilitating differentiation and improving brand impressions in a congested competitive environment. Consistent with this mechanism, Study 2 reveals that as an industry becomes more cluttered, persuasive tone (volume) becomes more (less) effective in impacting consumers’ brand impressions. The findings provide important insights for service companies that operate under different levels of industry competitiveness.

Journal

Journal of Service Research – SAGE

Published: Feb 1, 2023

Keywords: social media communication; industry competitiveness; company value

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