How and when social media affects innovation in start-ups. A moderated mediation model

Abstract

Despite social media's increasing use in industrial markets to foster business outcomes, empirical evidence on its use among firms collaborating for innovation is equivocal. Using data from 1769 Australian start-ups, we examine how and under what conditions social media influences innovation outcomes.Our results demonstrate that social media has a significant positive impact on start-ups' innovation outcomes. We also find that managerial learning from start-up networks mediate the relationship between social media and innovation. In addition, market and technological dynamism moderate positively the effect of social media on innovation, such that the effect is stronger when environments are dynamic. While market dynamism also moderates the indirect effect of social media on innovation via managerial learning from start-up networks, in technologically stable environments managerial learning from network actors mediate the social media-innovation relationship.The study contributes to innovation network research by providing large scale quantitative evidence, delineating the process by which entrepreneurs use social media and managerial learning from network actors to innovate, and the contingent role of environmental dynamism. In doing so, we present a moderated mediation analysis leading to a more fine-grained understanding of how and under what conditions social media influences innovation outcomes in start-ups.