Impact of Facebook Usage on Firm’s Performances among Malaysian Chinese Retailers

Social media including Facebook has been acknowledged to play a vital role in firms achieving superior performance. Malaysia is a multicultural country in which the Malaysian Chinese are considered to be the most successful entrepreneurs. There is, however, a lack of research regarding the influence of Facebook usage on firm performance among Malaysian Chinese retailers. As such, this study had two aims. Firstly, the study investigated the influence of compatibility, cost effectiveness, trust, and interactivity on Facebook usage among Malaysian Chinese retailers. Secondly, the study assessed the impact of these retailers’ Facebook usage on their perceived financial performance, perceived non-financial performance, perceived business growth, and perceived performance relative to competitors under the moderating impact of market turbulence. This study developed a conceptual model based on the Strategic Contingency Theory (SCT) and Diffusion of Innovation (DOI) theory, and used a structured survey instrument to gather data. Using non-probability sampling techniques, 129 Malaysian Chinese retailers from Kuala Lumpur and Selangor were recruited for the study. Data was analysed using PLS-SEM techniques. The results showed that only compatibility, cost effectiveness, and interactivity have a statistically significant positive influence on Facebook usage, which in turn has a statistically significant positive influence on the retailers’ perceived financial performance, perceived non-financial performance, perceived business growth, and perceived performance relative to competitors. Moreover, market turbulence was only found to be a moderator that improves the impact of Facebook usage on perceived financial performance, perceived business growth, and perceived performance relative to competitors, but not perceived non-financial performance. These findings contribute to current literature and provide insights into the role and importance of Facebook usage on firm performance among Malaysian Chinese retailers, possibly encouraging more retailers to deploy social media in their business processes.