Does Facebook Commerce Enhance SMEs Performance? A Structural Equation Analysis of Omani SMEs

Abstract

This research aims to identify the factors affecting the adoption of Facebook commerce, in specific the adopted Facebook advertisements for both small and medium enterprises (SMEs) and how this contributes to enhancing such SMEs’ organizational performances. Specifically, ease of use, demographic targeting, interaction, and brand awareness are regarded as the key factors that can influence Facebook’s advertisements adoption. However, three organizational performance dimensions (efficiency, flexibility, and responsiveness) are considered to be the most significant areas of focus in this research. In this study, both the quantitative research approach and the descriptive research design were employed. Data were collected from different SMEs in Muscat and Dhofar in Oman, and the total valid questionnaires suitable for analysis reached 342. The participants were primarily from those who publicize their services through Facebook. Many statistical techniques including exploratory, confirmatory, and structural equation modeling have been adopted in this study; meanwhile, the quantitative data were analyzed using SPSS 25 and AMOS 25 softwares. The findings of this study suggested that the ease of use, demographic targeting, interaction, and brand awareness interpreted 20% of the variance in the Facebook advertisements as the dependent variable. However, Facebook advertisements as an independent variable were found to have a statistically significant effect on the SMEs’ performance dimensions (efficiency, flexibility, and responsiveness) with standard regressions of 0.66, 0.51, and 0.74, respectively, thereby explaining 44% of the variance in the efficiency, 26% of the variance in the flexibility, and 55% of the variance in the responsiveness. Regarding the researchers’ knowledge, this research stands out as the first research to highlight SMEs that measure statistically the relationship between the organizational performance dimensions and Facebook advertising as key social media tools within a unique context—such as Oman as an example of developing countries.