The Determinants of Firm Profitability: The Effect of Social Media

Abstract

This study seeks to explore whether social media plays an important role in determining a firm’s profits. Using data from 392 Large American firms from the period 2005-2013, obtained primarily from the database, COMPUSTAT, I find that a firm’s adoption of Social Media plays a minor role in determining profits, while higher Lagged Profits, Lagged Productivity, Firm Sizes, and Advertising Expenses lead to higher profits

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