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http://dx.doi.org/10.13106/jafeb.2021.vol8.no1.305

The Contribution of Social Media Value to Company's Financial Performance: Empirical Evidence from Indonesia  

MIQDAD, Muhammad (Accounting Department, Faculty of Economy and Business, University of Jember)
OKTAVIANI, Siska Aprilia (Accounting Department, Faculty of Economy and Business, University of Jember)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.1, 2021 , pp. 305-315 More about this Journal
Abstract
This article aims to explore the contribution of social media value to a company's financial performance in a digital environment economy since the awareness of companies and investors in the use of social media opens up new mechanisms for disseminating information. Quantitative method is used in this study with Multivariate Analysis of Variance as the analysis tool. The data used is secondary data gathered from Indonesia Stock Exchange (IDX) using 308 companies as samples. In the multivariate test, four kinds of multivariate significance tests were carried out, namely Pillai Trace, Wilk Lambda, Hotelling's Trace, and Roy's Largest Root. It was found that social media value has a small contribution in the difference of the level of profitability and the value of the company in Indonesia, but it doesn't have a contribution to the difference of the level of liquidity. The contribution was an implication of online Word of Mouth (WOM) motives which are interrelated with signal theory and as additional information for investors in relation to single-person decision theory. This study provides an insight into the importance of social media management considering that the world of digital economy will continue to develop, so companies in Indonesia need to take advantage of these opportunities.
Keywords
Social Media; Networking; Value; Financial Performance; Digital Economy;
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