Does Social Media Enhance Firm Value? Evidence from Turkish Firms Using Three Social Media Metrics

Abstract

This study investigates the impact created upon firm value when social media, in an emerging market context. Social media enables communication with stakeholders in terms of financial and non‑financial achievements, as well as issues of organization at low cost, in a direct and timely manner; thus, the study draws attention to the new phenomenon of enhanced value to firms through the use of social media. The sample consists of Turkish corporations listed on the BIST 100 Index of Borsa Istanbul for the year 2014, utilizing three metrics regarding social media usage: establishment of a social media account, the breadth of social media engagement, and the depth of social media engagement. The results demonstrate that depth of social media engagement has a significant positive association with firm value; whereas social media account ownership per se, and breadth of social media engagement do not show a viable statistical relationship. These findings imply that if social media accounts are opened and icons for several social media are placed on corporate websites, which is presently a fad and fashion, a benefit may not necessarily accrue. However, strong engagement for corporate purposes will generate the desired results and benefits. Thus, the study provides implications and guidance for firms which are using social media currently or thinking of using it in the future.