The interplay between digital social capital and family-owned SME performance: a study of social media business networks

Abstract

PurposeThis paper aims to examine the relationship between being members of social media business networks and SME performance by comparing business performance between family-owned SMEs that are members and non-members of social media business networks.Design/methodology/approachThe analysis empirically draws on cross-sectional data of 9,292 English and Welsh family-owned SMEs from the UK's Government Small Business Survey 2015. Propensity Score Matching (PSM) is applied to control for selection bias and differences in firm characteristics before comparing business performance, measured in terms of annual turnover, sales-growth intention and innovation between family-owned SMEs that are members and non-members of social media business networks.FindingsThe findings show that family-owned SMEs that are members of social media business networks are more likely to have higher prior turnover and to grow their sales than non-members. Also, they are more likely to report being innovative in products and processes than non-members. The empirical results acknowledge the importance of online business networks and digital social capital on enhanced family-owned business performance.Originality/valueThis paper is the first to explore the comparative analysis of business performance between family-owned SMEs that are members and non-members of social media business networks. This paper is important for the development of family business research by providing a comprehensive evidence-based analysis regarding the importance of online business networks to improve family-owned business performance, given the significant contribution of digital business activities to the UK economy.

Tech, Tradition, and Values: Transformative Paths for Family Businesses

“…Recent research shows that FBs use advanced digital technologies for various SEW-related objectives. For example, social media was used by FBs for several SEW-related purposes; developing business partners, increasing brand awareness, and strengthening relationships with customers (Obermayer et al, 2022;Tiwasing et al, 2022). Likewise, artificial intelligenceintegrated customer relationship management (AI-CRM) has been reported to play a key role in sustaining family businesses during times of crises (Chaudhuri et al, 2023).…”