The impact of social media usage on performance of the banking sector in Middle East and North Africa countries

Abstract

Most of the studies on social media usage (SMU) are based on the individual view while some are from the organizational viewpoint. Nevertheless, most of these studies were conducted in developed economies and concentrated on large organizations. However, not many studies have examined the actual impact of SMU on performance of banking sector. This research, therefore, fills this gap by looking at the SMU -specifically Facebook usage- in the banking sector of twelve different countries in the Middle East and North Africa (MENA) region. The data is drawn from the annual reports of 102 banks as well as from Social-baker database during the period of 2012 – 2016. Seven simple linear regression models are applied to find the impact of SMU on each facet of bank performance. The results of the research indicated a positive significant impact of SMU on financial and non-financial performance of banks in MENA countries in terms of profitability, growth and environmental performance. Therefore, this research recommends that managers of the banking sector in MENA countries should be conscious that their banks’ performance could be enhanced by developing capabilities and competences related to SMU and by having a strong intention to use these tools.