Factors Influencing the Adoption of Social Media Marketing by Micro, Small, and Medium-sized Enterprises (MSMEs) of the Maldives and its Impact on MSME Performance

Abstract

This paper aims to investigate factors affecting the adoption of social media marketing by Maldivian Micro, Small, and Medium-sized Enterprises (MSMEs) and their impact on MSME performance. Based on previous international research and local contextual knowledge, the study hypothesises that relative advantage, cost effectiveness, interactivity, top management support, and competitive pressure influence the adoption of social media marketing, which consequently impacts MSME performance. Hundred-and-Eight MSMEs from the Greater Malé region in the Maldives participated in the study. Pearson correlation, and simple and multiple linear regression were used for data analysis. Results indicate that all of the individual hypothesised factors have a positive significant impact on social media marketing adoption. The regression analysis model shows that relative advantage and interactivity have a significant positive impact on social media marketing adoption, whereas cost effectiveness, top management support, and competitive pressure do not have a significant positive impact on social media marketing. The study concludes that the adoption of social media marketing has a significant positive impact on MSME performance. Despite social media marketing being in its infancy among Maldivian MSMEs, this study supports the benefits of social media marketing as an ideal platform of marketing for MSMEs.