The Determinants of Startups' Financial Sustainability: The Mediating Role of Social Media Adoption
DOI:
https://doi.org/10.56532/mjbem.v2i2.258Abstract
Startups have become a vibrant and dynamic sector of the world economy, and information technology plays a vital role in improving their productivity and competitiveness. Using the Technology-Organization-Environment (TOE) framework, this study investigated the determinants of social media adoption among Malaysian startups and examined the mediating role of that adoption in the relationship between technological, organizational, and environmental factors and startups' financial sustainability. A quantitative, cross-sectional survey design was employed, with data collected from 116 Malaysian startup owners and employees identified through LinkedIn using convenience sampling. The instrument demonstrated acceptable reliability (Cronbach's alpha = 0.812 across 14 items). Path analysis showed that relative advantage (beta = 0.596, p < 0.001), managerial capabilities (beta = 0.325, p < 0.001), motivation factor (beta = 0.599, p < 0.001), and market factor (beta = 0.659, p < 0.001) each had significant direct effects on social media adoption. However, regression results indicated that social media adoption did not positively mediate the relationship between the technological, organizational, and environmental determinants and startups' financial sustainability; instead, a negative association with financial performance emerged, largely attributable to elevated marketing expenditure during the early stages of operation. The findings suggest that while Malaysian startups actively adopt social media for branding and customer engagement, the financial payoff of adoption is not immediate. Implications for founders, training providers, and policymakers supporting digitally-driven entrepreneurship in Malaysia are discussed.
References
Ahamat, A., Ali, M. S. S., & Hamid, N. (2017). Factors influencing the adoption of social media in small and medium enterprises (SMEs). International e-Journal of Advances in Social Sciences, 3(8), 338-348.
Ahmad, S. Z., Bakar, A. R. A., & Ahmad, N. (2019). Social media adoption and its impact on firm performance: The case of the UAE. International Journal of Entrepreneurial Behavior & Research, 25(1).
Ainin, S., Parveen, F., Moghavvemi, S., Jaafar, N. I., & Shuib, N. L. M. (2015). Factors influencing the use of social media by SMEs and its performance outcomes. Industrial Management & Data Systems, 115(3), 570-588.
Alalwan, A. A. (2018). Investigating the impact of social media advertising features on customer purchase intention. International Journal of Information Management, 42, 65-77.
Alford, P., & Page, S. J. (2015). Marketing technology for adoption by small business. The Service Industries Journal, 35(11-12), 655-669.
Amin, H. (2007). An analysis of mobile credit card usage intentions. Information Management & Computer Security, 15(4), 260-269.
Andrianos, E. (2017). Investigating the truth about social selling by industry.
Basri, W. S. (2017). Maximizing the social media potential for small businesses and startups: A conceptual study. International Journal of Economic Perspectives, 11(2), 241-245.
Beier, M., & Wagner, K. (2016). Social media adoption: Barriers to the strategic use of social media in SMEs. Proceedings of the 24th European Conference on Information Systems.
Chatterjee, S., & Kar, A. K. (2020). Why do small and medium enterprises use social media marketing and what is the impact: Empirical insights from India. International Journal of Information Management, 53, 102103.
Garg, P., Gupta, B., Dzever, S., Sivarajah, U., & Kumar, V. (2020). Examining the relationship between social media analytics practices and business performance in the Indian retail and IT industries: The mediation role of customer engagement. International Journal of Information Management, 52, 102069.
Iankova, S., Davies, I., Archer-Brown, C., Marder, B., & Yau, A. (2019). A comparison of social media marketing between B2B, B2C and mixed business models. Industrial Marketing Management, 81, 169-179.
Kane, G. C., Palmer, D., Nguyen Phillips, A., Kiron, D., & Buckley, N. (2017). Achieving digital maturity. MIT Sloan Management Review, in collaboration with Deloitte University Press.
Kapoor, K. K., Tamilmani, K., Rana, N. P., Patil, P., Dwivedi, Y. K., & Nerur, S. (2018). Advances in social media research: Past, present and future. Information Systems Frontiers, 20, 531-558.
Malaysian Communications and Multimedia Commission. (2018). Internet users survey 2018. MCMC.
Mohsin, M. (2021, February 10). 10 Facebook statistics every marketer should know in 2021. Oberlo.
Parveen, F., Jaafar, N. I., & Ainin, S. (2016). Social media's impact on organizational performance and entrepreneurial orientation in organizations. Management Decision, 54(9), 2208-2234.
Schaub, K. (2014). Social buying makes social selling: How trusted networks improve the purchase experience. LinkedIn Sales Solutions.
Statista Research Department. (2021, September 10). Number of global social network users 2017 to 2025.
Tajudeen, F. P., Jaafar, N. I., & Ainin, S. (2018). Understanding the impact of social media usage among organizations. Information & Management, 55(3), 308-321.
Vithayathil, J., Dadgar, M., & Osiri, J. K. (2020). Social media use and consumer shopping preferences. International Journal of Information Management, 54, 102117.
Wang, X.-W., Cao, Y.-M., & Park, C. (2019). The relationships among community experience, community commitment, brand attitude, and purchase intention in social media. International Journal of Information Management, 49, 475-488.
Downloads
Published
Issue
Section
License
Copyright (c) 2023 admin admin; Norzana Binti Zakiah @ Zakaria, Prof. Dr. Mohar Yusof
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
