Investigating the effect of social media application on firm capabilities and performance: The perspective of dynamic capability view

This study adopts the dynamic capability view in investigating the relationship between social media applications, firm capabilities, and performance. It highlights the dynamic and ever-changing environment, and firms with limited resources. It argues that social media is a strategic resource, and agility and adaptability are critical in measuring firms’ dynamic capabilities. The study further evaluates the mediating role of time-based performance on the relationship between these capabilities and firm performance. Drawing upon a sample of 249 firms, the findings validate the positive impact of social media on both capabilities and confirm the mediating effect of time-based performance on the relationship between agility, adaptability, and firm performance. Finally, the study provides some recommendations for senior management teams regarding social media application as a resource that can strengthen firms’ agility and adaptability, while time-based performance is seen to require special attention where the external business environment is volatile.