Social media and its impact on the financial performance on SMEs in developing countries: A literature review

Abstract

The purpose of this paper is to explore the impact of social media on the financial performance of Small and Medium Enterprises (SMEs).SMEs contribute to the development of developing economies such as Ghana. In the Ghanaian context, SMEs are responsible for employing about 45% of the country’s working population. Increased adoption of information technology has resulted in a paradigm shift in the business processes of SMEs and providing opportunities for growth within this sector. However, SMEs in Ghana are unable to leverage on this to promote their products and services through social media due to inadequate statistical evidence and minimal understanding of the returns of the financial performance of social media usage. Extant literature reviewed indicates thatfew empirical studies have been conducted by researchers concerning the financial performance of social media on SMEs in developing countries like Ghana.This study adopts a qualitative approach and document analysis as its methodology to fill this gap The document analysis reviews scientific papers on the subject area from the database of SCOPUS and Google Scholar via keywords search. The theoretical implication of this paper would provide insights into SMEs, and further increase knowledge to the existing literature.The study would offer practical knowledge to SMEs and other industry players to understand the use of social media based on its likely impact on their financial performance in a developing economy context. This study is limited in the selection of samples. The sample covers one community of SME in Ghana which limits the generalization of the findings. © European Conference on Social Media, ECSM 2020.