How social media enhances product innovation in Japanese firms

Abstract

A large number of firms use social media as new communication tools for obtaining information on consumer’s needs and market for developing new goods and services. Authors’ previous research found social media use promotes product innovation based on questionnaire data of Japanese firms. However, it was not clear whether social media effected directly on product innovation. This paper introduces a new variable constructed by achievement of product innovation and social media use and utilizes this as a dependent variable. The estimation methods conducted in the previous research are employed for probit analysis. This study finds all estimations have the same results. In addition, this paper also examines what kind of effect of social media is important for product innovation. The effects of social media such as obtaining trends and customer’s needs, and opening the FAQ site are found to be useful for achieving product innovation.