Social Media Usage On MSMEs' Performance: The Moderating Role Of Innovation Capability

Yordan Hermawan Apidana; Dian Rusvinasari

doi:10.24912/jm.v28i1.1805

Authors

Yordan Hermawan Apidana Faculty of Economics and Business, Putra Bangsa University, Kebumen, Indonesia
Dian Rusvinasari Faculty of Science and Technology, Putra Bangsa University, Kebumen, Indonesia

DOI:

https://doi.org/10.24912/jm.v28i1.1805

Keywords: Social Media; Innovation Capability; MSMEs' Performance.

Abstract

This study aims to determine whether using social media such as TikTok, Instagram, and Facebook can improve the performance of MSMEs if innovation capability is used effectively. The research employs a quantitative approach, involving 300 respondents who are MSME owners or managers in Kebumen Regency. The analysis utilizes the Partial Least Square (SmartPLS) method to assess the seven hypotheses proposed in this study. The results indicate that social media platforms like TikTok, Instagram, and Facebook positively influence MSMEs' performance. Additionally, innovation capability exhibits a positive impact on MSMEs' performance. Furthermore, innovation capability moderates the connection between Instagram usage and MSMEs' performance. However, it does not exert a similar moderating effect on the relationship between TikTok and Facebook usage and MSMEs' performance. These findings offer valuable insights for MSME owners and managers, enabling them to navigate and leverage the evolving landscape of social media marketing to maintain their competitiveness and performance.

Author Biographies

Yordan Hermawan Apidana, Faculty of Economics and Business, Putra Bangsa University, Kebumen, Indonesia

yordanhermawan@gmail.com

Dian Rusvinasari, Faculty of Science and Technology, Putra Bangsa University, Kebumen, Indonesia

dianrusvinasari@gmail.com

References

Aas, T. H., & Breunig, K. J. (2017). Conceptualizing Innovation Capabilities: A Contingency Perspective. Journal of Entrepreneurship, Management and Innovation, 13(1), 7–24. https://doi.org/10.7341/20171311.

Adyatma, M. (2022). MSMEs’ Strategy For Delivering Messages Through TikTok Content. Jurnal Aspikom, 7(1), 202. https://doi.org/10.24329/aspikom.v7i1.996.

Ahmad, S. Z., Abu Bakar, A. R., & Ahmad, N. (2019). Social Media Adoption And Its Impact On Firm Performance: The Case Of The UAE. International Journal of Entrepreneurial Behaviour and Research, 25(1), 84–111. https://doi.org/10.1108/IJEBR-08-2017-0299.

Akbar, A. (2021). Factors Influencing The Usage Of Instagram For Business And Its Effect On Financial Performance And Non-Financial Performance. Journal of Digitovation and Information System, 1(1), 43–55. https://doi.org/10.54433/JDIIS.2021100004.

Alraja, M. N., Khan, S. F., Khashab, B., & Aldaas, R. (2020). Does Facebook Commerce Enhance SMEs Performance? A Structural Equation Analysis of Omani SMEs. SAGE Open, 10(1). https://doi.org/10.1177/2158244019900186.

Aziz, H. A. (2023). Moderation Of Innovation Capability On Innovation Performance Relationship. International Journal of Management Concepts and Philosophy, 16(1), 67. https://doi.org/10.1504/IJMCP.2023.128783.

Bahta, D., Yun, J., Islam, M. R., & Ashfaq, M. (2021). Corporate Social Responsibility, Innovation Capability And Firm Performance: Evidence From SME. Social Responsibility Journal, 17(6), 840–860. https://doi.org/10.1108/SRJ-12-2019-0401.

Bank Indonesia. (2022). Indonesia Economic Report 2020. https://www.bi.go.id/en/publikasi/laporan/Pages/LPI_2020.aspx.

Barney, J. B. (1991). Firm Resources And Sustained Competitive Advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108.

Belas, J., Amoah, J., Dvorsky, J., & Suler, P. (2021). The Importance Of Social Media For the Management Of Smes. Economics and Sociology, 14(4), 118–132. https://doi.org/10.14254/2071-789X.2021/14-4/7.

Bengtsson, S., & Johansson, S. (2022). The Meanings Of Social Media Use In Everyday Life: Filling Empty Slots, Everyday Transformations, And Mood Management. Social Media Society, 8(4), 205630512211302. https://doi.org/10.1177/20563051221130292.

Borah, P. S., Iqbal, S., & Akhtar, S. (2022). Linking Social Media Usage And SME’s Sustainable Performance: The Role Of Digital Leadership And Innovation Capabilities. Technology in Society, 68. https://doi.org/10.1016/j.techsoc.2022.101900.

Byukusenge, E., & Munene, J. C. (2017). Knowledge Management And Business Performance: Does Innovation Matter? Cogent Business and Management, 4(1). https://doi.org/10.1080/23311975.2017.1368434.

DailySocial. (2023). MSME Empowerment Report 2022. https://dailysocial.id/research/msme-report-2022.

De Veirman, M., Cauberghe, V., Hudders, L., & De Pelsmacker, P. (2017). Consumers’ Motivations For Lurking And Posting In Brand Communities On Social Networking Sites. Routledge eBooks (pp.207–221). https://doi.org/10.4324/9781315623252-12.

De Zubielqui, G., Fryges, H., & Jones, J. (2019). Social Media, Open Innovation And HRM: Implications For Performance. Technological Forecasting and Social Change, 144, 334–347. https://doi.org/10.1016/j.techfore.2017.07.014.

DataReportal. (2023). Digital 2023: Indonesia. https://datareportal.com/reports/digital-2023-indonesia.

Dodokh, A., & Al-Ma’aitah, M. (2019). Impact Of Social Media Usage On Organizational Performance In The Jordanian Dead Sea Cosmetic Sector. European Journal of Business and Management, 11(2), 75-91. https://doi.org/10.7176/EJBM/11-2-09.

D’Oria, L., Crook, T. R., Ketchen, D. J., Sirmon, D. G., & Wright, M. (2021). The Evolution Of Resource-Based Inquiry: A Review And Meta-Analytic Integration Of The Strategic Resources–Actions–Performance Pathway. Journal of Management, 47(6), 1383–1429. https://doi.org/10.1177/0149206321994182.

Dwivedi, Y. K., Ismagilova, E., Hughes, D. L., Carlson, J., Filieri, R., Jacobson, J., Jain, V., Karjaluoto, H., Kefi, H., Krishen, A. S., Kumar, V., Rahman, M. M., Raman, R., Rauschnabel, P. A., Rowley, J., Salo, J., Tran, G. A., & Wang, Y. (2021). Setting The Future Of Digital And Social Media Marketing Research: Perspectives And Research Propositions. International Journal of Information Management, 59. https://doi.org/10.1016/j.ijinfomgt.2020.102168.

Emmanuel, B., Zhao, S., Egala, S. B., Mammet, Y., & Godson, K. (2022). Social Media And Its Connection To Business Performance—A Literature Review. American Journal of Industrial and Business Management, 12(05), 877–893. https://doi.org/10.4236/ajibm.2022.125045.

Fakhreldin, H., Shahin, M., & Miniesy, R. (2023). The Impact Of Facebook And Instagram On The Growth Of Egyptian MSMEs. Global Business and Economics Review, 29(1), 41–65. https://doi.org/10.1504/gber.2023.131945.

Fan, M., Qalati, S. A., Khan, M. a. S., Shah, S. M. M., Ramzan, M., & Khan, R. S. (2021). Effects Of Entrepreneurial Orientation On Social Media Adoption And SME Performance: The Moderating Role Of Innovation Capabilities. PLOS ONE, 16(4), e0247320. https://doi.org/10.1371/journal.pone.0247320.

Fang, G. G., Qalati, S. A., Ostic, D., Shah, S. M. M., & Mirani, M. A. (2022). Effects Of Entrepreneurial Orientation, Social Media, And Innovation Capabilities On SME Performance In Emerging Countries: A Mediated–Moderated Model. Technology Analysis and Strategic Management, 34(11), 1326–1338. https://doi.org/10.1080/09537325.2021.1957816.

Farida, I., & Setiawan, D. (2022). Business Strategies And Competitive Advantage: The Role Of Performance And Innovation. Journal of Open Innovation, 8(3), 163. https://doi.org/10.3390/joitmc8030163.

Ferreira, J., Coelho, A., & Moutinho, L. (2020). Dynamic Capabilities, Creativity And Innovation Capability And Their Impact On Competitive Advantage And Firm Performance: The Moderating Role Of Entrepreneurial Orientation. Technovation, 92–93, 102061. https://doi.org/10.1016/j.technovation.2018.11.004.

Ganguly, A., Kumar, C., Saxena, G., & Talukdar, A. (2020). Firms’ Reputation For Innovation: Role Of Marketing Capability, Innovation Capability, And Knowledge Sharing. Journal of Information and Knowledge Management, 19(02), 2050004. https://doi.org/10.1142/s0219649220500045.

Garrido-Moreno, A., García-Morales, V., King, S., & Lockett, N. (2020). Social Media Use And Value Creation In The Digital Landscape: A Dynamic-Capabilities Perspective. Journal of Service Management, 31(3), 313–343. https://doi.org/10.1108/JOSM-09-2018-0286.

Garrido-Moreno, A., Lockett, N., & Morales, V. J. G. (2018). Social Media Use And Customer Engagement. IGI Global eBooks (pp. 5775–5785). https://doi.org/10.4018/978-1-5225-2255-3.ch502.

Gbandi, E., & Iyamu, G. (2022). The Effect Of Social Media Marketing On The Growth Of Business: Evidence From Selected Small And Medium Enterprises (SMEs) In Benin City, Nigeria. Journal of Enterprise and Development (JED), 4(1). https://doi.org/10.20414/jed.v4i1.4918.

Genoveva, G. (2022). TikTok Platform Opportunity: How Does It Influence Smes Brand Awareness Among Generation Z? Sriwijaya International Journal Of Dynamic Economics And Business, 5(3), 273. https://doi.org/10.29259/sijdeb.v5i3.273-282.

Ghanem, S. K. R., & Hamid, N. a. A. (2020). The Effect Of Facebook, WhatsApp, Twitter And Email On SMEs Performance: Empirical Evidence From United Arab Emirates. Journal of Internet Social Networking and Virtual Communities, 1(17). https://doi.org/10.5171/2020.618899.

Ghozali, I. (2021). Partial Least Squares Konsep, Teknik Dan Aplikasi Menggunakan Program SmartPLS 3.2.9 Untuk Penelitian Empiris (3rd ed.). Universitas Diponegoro.

Gnizy, I. (2019). Big Data And Its Strategic Path To Value In International Firms. International Marketing Review, 36 (3), 318–341. https://doi.org/10.1108/imr-09-2018-0249.

Hafez, M. (2022). Unpacking The Influence Of Social Media Marketing Activities On Brand Equity In The Banking Sector In Bangladesh: A Moderated Mediation Analysis Of Brand Experience And Perceived Uniqueness. International Journal of Information Management Data Insights, 2(2). https://doi.org/10.1016/j.jjimei.2022.100140.

Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When To Use And How To Report The Results Of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203.

Hanafizadeh, P., Shafia, S., & Bohlin, E. (2021). Exploring The Consequence Of Social Media Usage On Firm Performance. Digital Business, 1(2). https://doi.org/10.1016/j.digbus.2021.100013.

Hardwick, J., & Anderson, A. R. (2019). Supplier-Customer Engagement For Collaborative Innovation Using Video Conferencing: A Study Of SMEs. Industrial Marketing Management, 80, 43–57. https://doi.org/10.1016/j.indmarman.2019.02.013.

Imran, M., Salisu, I., Aslam, H., Iqbal, J., & Hameed, I. (2019). Resource And Information Access For SME Sustainability In The Era Of IR 4.0: The Mediating And Moderating Roles Of Innovation Capability And Management Commitment. Processes, 7(4), 211. https://doi.org/10.3390/pr7040211.

Jakpat. (2023). Mobile Entertainment And Social Media Trend. https://blog.jakpat.net/indonesia-mobile-entertainment-social-media-trends-1st-semester-of-2023/.

Kim, D., & Jin, S. (2022). Innovation Capabilities And Business Performance In The Smart Farm Sector Of South Korea. Journal of Open Innovation, 8(4), 204. https://doi.org/10.3390/joitmc8040204.

Le, T. T., & Chakrabarti, S. (2023). Social Media And Business Innovation Capabilities Toward Enhancing Firm’s Performance: An Empirical Research From Environmental Quality Approach. Management of Environmental Quality. https://doi.org/10.1108/MEQ-01-2023-0031.

Lee, B., Rizal, A. M., Khalid, H., Salam, Z. A., & Sahimi, M. (2021). Factors Influence Malaysian Small-Medium Enterprises to Engage In Facebook Marketing. International Journal of Academic Research in Business and Social Sciences, 11(11). https://doi.org/10.6007/ijarbss/v11-i11/11266.

Lestari, E. R., Rodhiyah, D. S. N., & Najah, E. S. (2020). Drivers Of Innovation And Its Impact On Business Performance. IOP Conference Series: Earth and Environmental Science, 475(1). https://doi.org/10.1088/1755-1315/475/1/012045.

Limanseto, H. (2022). Coordinating Minister Airlangga: Government Continues to Encourage Strengthening Economic Foundations by Establishing Digital Transformation of MSMEs as One of the Priorities. https://ekon.go.id/publikasi/detail/4065/coordinating-minister-airlangga-government-continues-to-encourage-strengthening-economic-foundations-by-establishing-digital-transformation-of-msmes-as-one-of-the-priorities.

Luthen, M. D., & Soelaiman, L. (2022). Factors Affecting The Use Of Social-Media Tiktok To Improve SME Performance. Proceedings of the 3rd Tarumanagara International Conference on the Applications of Social Sciences and Humanities (TICASH 2021), 655. https://doi.org/10.2991/assehr.k.220404.033.

Ma, Y., & Hu, Y. (2021). Business Model Innovation And Experimentation In Transforming Economies: Bytedance And TikTok. Management and Organization Review, 17(2), 382–388. https://doi.org/10.1017/mor.2020.69.

Martín-Rojas, R., Garrido-Moreno, A., & García-Morales, V. J. (2020). Fostering Corporate Entrepreneurship With The Use Of Social Media Tools. Journal of Business Research, 112, 396–412. https://doi.org/10.1016/j.jbusres.2019.11.072.

Odoom, R., Anning-Dorson, T., & Acheampong, G. (2017). Antecedents Of Social Media Usage And Performance Benefits In Small- And Medium-Sized Enterprises (SMEs). Journal of Enterprise Information Management, 30(3), 383–399. https://doi.org/10.1108/JEIM-04-2016-0088.

Odoom, R., & Mensah, P. (2019). Brand Orientation And Brand Performance In SMEs: The Moderating Effects Of Social Media And Innovation Capabilities. Management Research Review, 42(1), 155–171. https://doi.org/10.1108/MRR-12-2017-0441.

Olanrewaju, A. T., Hossain, M. A., Whiteside, N., & Mercieca, P. (2020). Social Media And Entrepreneurship Research: A Literature Review. International Journal of Information Management, 50, 90–110. https://doi.org/10.1016/j.ijinfomgt.2019.05.011.

Oyewobi, L. O., Adedayo, O. F., Olorunyomi, S. O., & Jimoh, R. (2021). Social Media Adoption And Business Performance: The Mediating Role Of Organizational Learning Capability (OLC). Journal of Facilities Management, 19(4), 413–436. https://doi.org/10.1016/j.ijinfomgt.2019.05.011.

Phuangrod, K., Lerkiatbundit, S., & Aujiraponpan, S. (2017). Factor Affecting Innovativeness Of Small And Medium Enterprises In The Five Southern Border Provinces. Kasetsart Journal of Social Sciences, 38(3), 204–211. https://doi.org/10.1016/j.kjss.2016.07.008.

Prasanna, R., Jayasundara, J., Gamage, S. K. N., Ekanayake, E., Rajapakshe, P., & Abeyrathne, G. (2019). Sustainability Of SMEs In The Competition: A Systemic Review On Technological Challenges And SME Performance. Journal of Open Innovation, 5(4), 100. https://doi.org/10.3390/joitmc5040100.

Qalati, S. A., Yuan, L. W., Khan, M. A. S., & Anwar, F. (2021). A Mediated Model On The Adoption Of Social Media And SMEs’ Performance In Developing Countries. Technology in Society, 64. https://doi.org/10.1016/j.techsoc.2020.101513.

Rajapathirana, R. P. J., & Hui, Y. (2018). Relationship Between Innovation Capability, Innovation Type, And Firm Performance. Journal of Innovation and Knowledge, 3(1), 44–55. https://doi.org/10.1016/j.jik.2017.06.002.

Rangaswamy, A., Moch, N., Felten, C., van Bruggen, G., Wieringa, J. E., & Wirtz, J. (2020). The Role of Marketing in Digital Business Platforms. Journal of Interactive Marketing, 51, 72–90. https://doi.org/10.1016/j.intmar.2020.04.006.

Rockwell, S. (2019). A Resource-Based Framework For Strategically Managing Identity. Journal of Organizational Change Management, 32(1), 80–102. https://doi.org/10.1108/JOCM-01-2018-0012.

Rumanti, A. A., Rizana, A. F., Septiningrum, L., Reynaldo, R., & Isnaini, M. M. (2022). Innovation Capability And Open Innovation For Small And Medium Enterprises (SMEs) Performance: Response In Dealing With The COVID-19 Pandemic. Sustainability, 14(10), 5874. https://doi.org/10.3390/su14105874.

Salam, M. T., Imtiaz, H., & Burhan, M. (2021). The Perceptions Of SME Retailers Towards The Usage Of Social Media Marketing Amid COVID-19 Crisis. Journal of Entrepreneurship in Emerging Economies, 13(4), 588–605. https://doi.org/10.1108/JEEE-07-2020-0274.

Saunila, M. (2020). Innovation Capability In SMEs: A Systematic Review Of The Literature. Journal of Innovation and Knowledge, 5(4), 260–265. https://doi.org/10.1016/j.jik.2019.11.002.

Sharabati, A. A., Al-Haddad, S., Khasawneh, M. H. A., Nababteh, N., Mohammad, M. H., & Ghoush, Q. A. (2022). The Impact Of TikTok User Satisfaction On Continuous Intention To Use The Application. Journal of Open Innovation, 8(3), 125. https://doi.org/10.3390/joitmc8030125.

Siagian, A. O., Riesmiyantiningtias, N., & Amalia, R. (2022). Planning Model And Questionnaire for Measuring MSME Performance Through (TOE) Technology Organization Environment. Journal of Computer Networks, Architecture and High Performance Computing, 4(1), 13–19. https://doi.org/10.47709/cnahpc.v4i1.1213.

Ssempala, R., & James, M. (2018). Determinants OF Growth OF Micro, Small And Medium Enterprises (MSMEs) In Developing Countries Evidence From Rubaga Division, Kampala District Uganda. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3103636.

Subarna, A. D., & Arianti, A. S. (2020). Analysis On User Interfaces Readability: A Case Study Of Instagram. IOP Conference Series: Materials Science and Engineering, 879(1). https://doi.org/10.1088/1757-899X/879/1/012118.

Tajudeen, F. P., Jaafar, N. I., & Sulaiman, A. (2018). Understanding The Impact Of Social Media Usage Among Organizations. Information and Management, 55(3), 308–321. https://doi.org/10.1016/j.im.2017.08.004.

Tajvidi, R., & Karami, A. (2021). The Effect Of Social Media On Firm Performance. Computers in Human Behavior, 115. https://doi.org/10.1016/j.chb.2017.09.026.

Takacs, F., Brunner, D., & Frankenberger, K. (2022). Barriers To A Circular Economy In Small- And Medium-Sized Enterprises And Their Integration In A Sustainable Strategic Management Framework. Journal of Cleaner Production, 362. https://doi.org/10.1016/j.jclepro.2022.132227.

Taylor, S. P. (2017). What Is Innovation? A Study Of The Definitions, Academic Models And Applicability Of Innovation To An Example Of Social Housing In England. Open Journal of Social Sciences, 05(11), 128–146. https://doi.org/10.4236/jss.2017.511010.

The Office Of Cooperative And Micro Small And Medium Enterprise Province Of Central Java. (2023). UMKM Kabupaten Kebumen. https://satudata.dinkop-umkm.jatengprov.go.id/data/umkm-kabkota/Kabupaten%20Kebumen.

Timotius, E. (2023). The Role Of Innovation In Business Strategy As A Competitive Advantage: Evidence From Indonesian MSMEs. Problems and Perspectives in Management, 21(1), 92–106. https://doi.org/10.21511/ppm.21(1).2023.09.

Tjahjadi, B., Soewarno, N., Jermias, J., Hariyati, H., Fairuzi, A., & Anwar, D. N. (2022). Does Engaging In Global Market Orientation Strategy Affect HEIs’ Performance? The Mediating Roles Of Intellectual Capital Readiness And Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(1). https://doi.org/10.3390/joitmc8010029.

Vakulenko, M. (2021). The Moderating Role Of Innovation Capability In The Relationship Between The Liability Of Smallness And Innovative Outputs. Technology Analysis and Strategic Management, 33(8), 914–926. https://doi.org/10.1080/09537325.2020.1850674.

Wang, M., Asian, S., Wood, L. C., & Wang, B. (2020). Logistics Innovation Capability And Its Impacts On The Supply Chain Risks In The Industry 4.0 Era. Modern Supply Chain Research and Applications, 2(2), 83–98. https://doi.org/10.1108/mscra-07-2019-0015.

Wang, X., & Dass, M. (2017). Building Innovation Capability: The Role Of Top Management Innovativeness And Relative-Exploration Orientation. Journal of Business Research, 76, 127–135. https://doi.org/10.1016/j.jbusres.2017.03.019.

Yasa, N. N. K., Giantari, I. G. A. K., Sukaatmadja, I. P. G., Sukawati, T. G. R., Ekawati, N. W., Nurcaya, I. N., Rahanatha, G. B., & Astari, A. A. E. (2021). The Role Of Relational And Informational Capabilities In Mediating The Effect Of Social Media Adoption On Business Performance In the Fashion Industry. International Journal of Data and Network Science, 5(4), 569–578. https://doi.org/10.5267/j.ijdns.2021.8.011.

YuSheng, K., & Ibrahim, M. (2020). Innovation Capabilities, Innovation Types, And Firm Performance: Evidence From The Banking Sector Of Ghana. SAGE Open, 10(2). https://doi.org/10.1177/2158244020920892.