The Mediating Role of Marketing Innovation Between Internal Social Media Utilization and Business Performance of Smes in Saudi Arabia

Abstract

Purpose: The usage of social media (SM) by small and medium enterprises (SMEs) received relatively less attention and the findings in the literature are mixed in terms of the effect of SM on SME performance. The purpose of this study is to examine the effect of SM utilization on SME business performance (SMEBP) in Saudi Arabia. Theoretical Framework: Based on the resource-based view, this study proposed that SM internal utilization (SMIU) affects positively the SMEBP and marketing innovation (MI). MI is expected to affect the SMEBP and mediate the effect of SMIU on SME performance (profitability (PR) and business growth (BG). Design/Methodology/Approach: The population of this study is the SMEs in Al-Riyadh city in Saudi Arabia. A simple random sampling is deployed. The data was collected using a questionnaire. A total of 451 respondents representing SMEs participated in this study. Findings: The finding was derived using Smart PLS version 4. The findings showed that SMIU affected positively PR and BG of SME and MI. MI affected positively the PR and BG of SME and mediated partially the effect of SMIU on PR and BG of SME. Research practical Implication: Decision makers are advised to deploy SM more effectively and to create a rewarding culture for innovative ideas to improve performance. Originality/Value: This study helps to enhance the understanding regarding the role of marketing innovation and social media internal usage in improving the performance of SMEs in emerging economies.