Impact of Firm-Generated Content on Firm Performance and Consumer Engagement: Evidence from Social Media in China

Social media has become an important channel for firms to market and promote their brands, products, etc., but research on its marketing effect, especially the effect of different types of marketing content, is still in its infancy. Based on the dynamic capability theory, we analyzed the relationship between social media marketing, measured by firm-generated content, and firm performance and consumer engagement. Then, we validated the relationship with the panel simultaneous equation model using firm social media marketing and consumer engagement data from Sina Microblog, which is the most popular social media platform in China. The results show that firm social media marketing has a significant positive impact on firm performance. Informative and Persuasive firm-generated content have significant impacts on firm performance in direct way as well as indirect way by achieving with influencing consumer engagement. Our findings have various implications for academic research and practice.