The Effect of Social Media on Bank Performance: an Fsqca Approach

Corporate e-reputation is becoming more and more relevant for firms, partly because of its importance for firm value. In this context, this paper provides comprehensive theoretical and empirical evidence concerning the relationship between electronic word-of-mouth (eWOM), e-reputation, and bank financial performance. First, the study is also intended to determine the effect of eWOM, in terms of components (strength, sentiment, passion, and reach), on e-reputation, allowing for a holistic understanding of these relationships in the sense of the causal chain of factors, which is of high relevance when managing e-reputation. Second, it investigates the effect of e-reputation on bank performance in the US. This paper applies a fuzzy set qualitative comparative analysis technique to the raw data. The results reveal a significant positive relationship between e-reputation on Facebook and bank performance. Moreover, the findings suggest that eWOM components (strength, sentiment, passion, and reach) significantly positively impact e-reputation among US banks, that is, a higher ranking on Facebook because of an increased number of fans).