Empirical analysis of internal social media and product innovation : focusing on SNS and social capital

Recently social media such as Blog and SNS has been introducing by many firms for means of sharing information inside the firm, in particular to promote product and process innovation. This paper attempts to examine the relationship between social media and product innovation, and research questions are summarized as follows: (i) whether social capital influences the use of social media; (ii) whether social media promotes product innovation; and (iii) whether the effect of social media on product innovation is different in the manufacturing and service industry. The analysis clarifies that social capital in the firm is indispensable for the effective use of social media. Managerial attitudes toward innovation and social media are requirements for firms to promote product innovation. Managers thus should make an effort to raise social capital and nurture reciprocal culture for SNS use inside the firm. The paper finds that social media for product innovation is more important in the service industry than manufacturing. Social media makes it easy to obtain customers' information and share it among related sections, because social media enables to expand channels to make contact directly with the customer in the service industry. -- Social Media , Product Innovation ; Social Capital ; Ordered Probit Regression