The mediating role of knowledge creation processes in the relationship between social media and open innovation

Journal of the Knowledge Economy The mediating role of the creation knowledge process in the relationship between Social Media and Open Innovation --Manuscript Draft-- Manuscript Number: Full Title: The mediating role of the creation knowledge process in the relationship between Social Media and Open Innovation Article Type: Original Paper Corresponding Author: Ignacio Cepeda-Carrion US: Universidad de Sevilla SPAIN Corresponding Author Secondary Information: Corresponding Author's Institution: US: Universidad de Sevilla Corresponding Author's Secondary Institution: First Author: Ignacio Cepeda-Carrion First Author Secondary Information: Order of Authors: Ignacio Cepeda-Carrion Jaime Ortega-Gutierrez Aurora Garrido-Moreno Juan Gabriel Cegarra-Navarro Order of Authors Secondary Information: Funding Information: Abstract: Purpose The purpose of the study is empirically examine the role of the absorptive capacity, as process of creation of knowledge, in the relationship between social media and open innovation in the family firms context. In addition, the impact of social media use as an antecedent of open innovation in the firms. Methodology The sample amounts to 113 responding family firms in Spain. The model was estimated through PLS-SEM with smartPLS software 3.3.3. Findings The results confirm the key role played by absorptive capacity in the relationship between social media use and open innovation and highlighting also how social media use appears as a relevant enabler of open innovation practices. Moreover, the results confirm the importance of social media use for acquiring external information and knowledge which in turn can help family firms gain more innovative opportunities. Practical implications Our paper suggests that managers of family firms should foster an appropriate culture of learning in their firms and provide specific training to develop the staff ability to acquire, integrate and use information captured in digital platforms. Originality Powered by Editorial Manager® and ProduXion Manager® from Aries Systems Corporation Social Media has totally transformed the way firms relate to the market and provides a useful tool to collect external knowledge and information. These tools are used by family firms as a new form to connect and collaborate with different stakeholders, so they have the potential to enhance open innovation activities. However, empirical research on the topic remains scarce, and is challenging for managers to benefit from all the potential that social media can brings in fostering innovation and to develop dynamic capacities of knowledge management in the family firms context. This work shed light on this topic. Suggested Reviewers: Powered by Editorial Manager® and ProduXion Manager® from Aries Systems Corporation The mediating role of the creation knowledge process in the relationship between Social Media and Open Innovation Abstract Purpose: The purpose of the study is empirically examine the role of the absorptive capacity, as process of creation of knowledge, in the relationship between social media and open innovation in the family firms context. In addition, the impact of social media use as an antecedent of open innovation in the firms. Methodology: The sample amounts to 113 responding family firms in Spain. The model was estimated through PLS-SEM with smartPLS software 3.3.3. Findings: The results confirm the key role played by absorptive capacity in the relationship between social media use and open innovation and highlighting also how social media use appears as a relevant enabler of open innovation practices. Moreover, the results confirm the importance of social media use for acquiring external information and knowledge which in turn can help family firms gain more innovative opportunities. Practical implications: Our paper suggests that managers of family firms should foster an appropriate culture of learning in their firms and provide specific training to develop the staff ability to acquire, integrate and use information captured in digital platforms. Originality: Social Media has totally transformed the way firms relate to the market and provides a useful tool to collect external knowledge and information. These tools are used by family firms as a new form to connect and collaborate with different stakeholders, so they have the potential to enhance open innovation activities. However, empirical research on the topic remains scarce, and is challenging for managers to benefit from all the potential that social media can brings in fostering innovation and to develop dynamic capacities of knowledge management in the family firms context. This work shed light on this topic. Keywords: Social Media, Open Innovation, Absorptive Capacity, Family Firms, Knowledge Management Paper type: Research paper Main document Click here to view linked References 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 1. Introduction A relevant paradigm emerges in the family firms as the open innovation to welcome and develop the figure of innovation in the companies. In the last decades, it has become one of the most relevant concepts in innovation management, and it basically involves opening up the innovation process to collaborate with external agents or outsiders (Huizingh, 2011). In current dynamic, complex and globalized business environment, family businesses need to rely more on external resources of information to generate and sustain competitive advantages (Popa et al., 2017; Jalilvand et al., 2017). Innovation is seen as the outcome of an interactive process between the firm and its environment, as a result of the collaborations among a wide range of actors (Mention, 2011). Social Media is also having a transformative impact in their innovation processes (Aral et al., 2013; De Zubielqui et al., 2019). Those platforms foster communication and connections, creating new channels of information exchange with different stakeholders, and thus, they have the potential to facilitate innovation efforts in an open and collaborative environment (Mention et al., 2019). Consequently, they are considered as a key tool to facilitate Open Innovation, but due to the relative novelty of the phenomenon, empirical research on the impact of topic is still limited (Dahlander and Gann, 2010; Torres de Oliveira et al., 2019). Absorptive capacity is also recognized as a key topic in the Strategic Management literature, and it is considered a basic driver of Open Innovation practices (Spithoven et al., 2010). It is defined as the firm's ability to recognize the value of new information from the environment, assimilate it, and apply it to commercial ends (Cohen and Levinthal, 1990). As Zahra and George (2002) highlighted, Absorptive Capacity involves a set of organizational routines and processes through which firms acquire, assimilate, transform and exploit knowledge in order to create value and obtain a competitive advantage. Absorptive Capacity has been recognized as a relevant prerequisite to develop Open Innovation activities (Huizingh, 2011). Consequently, as prior literature highlights (Spithoven et al., 2010), in order to understand how to develop successful Open Innovation processes it is key to examine the specific role played by Absorptive Capacity. Family businesses are the most importance in the economy of a country and their significance becomes even greater if the consequences of their entrepreneurial work on the overall growth of a society are analysed. (Basco, 2010). The most respected authors have identified a set of characteristics in family businesses, such as: the family's 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 involvement in the ownership and management of the company; the family's involvement in the ownership and management of the business; that there is an interdependence of ownership and control; and of ownership and control; and that the firm is passed on from generation to generation with a desire for continuity (Ruiz, Sessarego and Guzmán-Sanza, 2010). As Brumana et al. (2017) point out, family firms adopt strategic behaviour conditioned by their idiosyncratic characteristics (e.g. family ownership, management and involvement) and motivations (e.g. transgenerational succession). As highlighted by Moss et al. (2014), family businesses have continuity as a principle in the way they operate, i.e. a culture focused on keeping the future in mind and reinforcing constancy. These points mentioned above are directly related to Knowledge Management, Innovation and Social Media. In recent times social media is being used as a facilitator of open innovation (Mount and García, 2014). Recent empirical studies have examined the impact of social media in knowledge creation and innovation processes (Papa et al., 2018; Pérez-González et al., 2017); its impact in fostering incremental and radical innovations (Torres de Oliveira et al., 2019); Following and Open Innovation perspective, De Zubielqui et al. (2019) empirically observed that external knowledge flows from market-based actors sourced by social media enhanced innovation, and they noted that it was necessary to better examine specific organisational mechanisms facilitating effective knowledge transfer in this process (Keegan & Rowley, 2017). Absorptive Capacity is going to play a key role also, as these capabilities are considered as organizational precondition to develop Open Innovation activities (Ooms et al., 2015). However, despite their relevance, the combined effect of social media use and Absorptive capacity on enhancing Open Innovation has not been properly examined in the literature. The purpose of our study is to extend knowledge on the topic, by empirically examining the relationship between social media use, Absorptive Capacity and Open Innovation. Specifically, we address the following research questions: How does social media use enhance Open Innovation practices and Absorptive Capacity in family firms? Is there a mediating effect of Absorptive Capacity of the impact of social media use on Open Innovation? The contributions of the study are twofold. First, considering that research on the topic was limited, it contributes to the literature by providing empirical evidence of the impact of social media use on enabling Open Innovation practices. Second, findings show that 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 Absorptive Capacity effectively mediates the impact of social media use on Open Innovation. Consequently, Absorptive Capacity appears as a necessary condition in order to leverage external knowledge captured via social media to enhance Open Innovation activities. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 2. Research model and hypotheses 2.1 Social Media and Open Innovation In recent years, scholarly attention has been focus on better understanding the role of social media in creating and managing knowledge flows both within the firm and across organizational boundaries, which can transform in new ideas for product and service development (Bhimani et al., 2019). There is a growing interest, both in the business and in the academic world, in examining how social media use can enhance open innovation activities in the family firms. The use of these tools offers family business an emerging opportunity to source new ideas and co-create those ideas with customers, so it has a great potential to improve organizational innovation processes and outcomes (Torres de Oliveira et al., 2019; Casprini, et al., 2017). Drawing on the dynamic capabilities theory, those authors confirmed that the use of social media tools enables the development of sensing and seizing capabilities. By using these platforms, firms can first identify emerging opportunities related with customers’ needs (Sashi, 2012), and seize co-creation processes to produce specific innovations (Parveen, Jaafar, & Ainin, 2016). Moreover, in the context of Open Innovation, the application of social media for exploration and exploitation activities specifically enhances creativity, expertise and collective intelligence, supporting firm ambidexterity during new product ideation (Mount and Garcia, 2014). It has been recognized that, in current hyper-competitive environments, social media platforms enable faster information flow and better knowledge sharing across their internal and external stakeholders, allowing firms to capture valuable ideas to become more innovative (Lam et al., 2016). Particularly, social media tools are being used to facilitate diverse activities in the innovation process: information and knowledge sharing in idea generation and new product development; employee collaboration and internal communication; inter-firm cooperation and supply chain management (De Zubielqui et al., 2019; Lam et al., 2016). It is well documented how firms from different sectors are using these tools to generate new ideas and enhance co-creation with customers. A well-known example is the case of Inditex Group. Inditex is the largest and most important Spanish family business and one of the most important at a global level. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 Specifically with its main brand, Zara, it has been developing and investing heavily in online platforms for years, and has a global e-commerce platform in operation, integrating all the markets, countries, and social networks in which it is present and through which it interacts with its customers and allowing customers to provide direct feedback on current offerings and submit new ideas for product or service development (Gallaugher and Ransbotham, 2010). Many of the family businesses due to the pandemic have had to boost their digital path in order to adapt to the big changes and follow the path of big companies like Inditex. Different studies in the literature have confirmed a positive effect of social media use on enhancing family firm innovation activities. García-Morales et al. (2018), observed how social media use enhanced knowledge competences and innovation capabilities, translating also into improved business performance. Similarly, Palacios-Marques et al. (2015) focusing on data from the hotel sector, confirmed a statistically significant positive relationship between online social networks and innovation capacity in the examined firms. Moreover, De Zubielqui et al. (2019), using a large-scale survey of SMEs from different sectors, observed a significant positive relationship between knowledge sourced via social media from market-based actors, and innovativeness. Based in all the above, we propose that: H1. Social Media use positively affects Open Innovation activities. 2.2 Social Media and absorptive capacity Within the knowledge management, absorptive capacity is one of the most important research constructs which have emerged in recent decades, and it has been particularly used in Information Systems literature. It refers to the firm´s ability to identify, assimilate and exploit knowledge from the environment, through a continual learning process (Lane et al., 2006). As Zahra and George (2002) highlighted, Absorptive Capacity can be considered as a key dynamic capability that enables the creation of other organizational competences and can provide the firm with multiple sources of competitive advantage in high-changing environments. We followed Zahra and George (2002) conceptualization and assume that Absorptive Capacity is composed by two subsets and four dimensions. These subsets are Potential Absorptive Capacity which involves the acquisition and assimilation of knowledge; and Realized Absorptive Capacity, which comprises the firm’s capacity to transform and exploit assimilated knowledge by incorporating it into 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 the firm’s operations. These four dimensions enable firms to reconfigure its resource base and be able to adapt it to changing markets conditions to achieve thus a competitive advantage (Spithoven et al., 2010). In current turbulent markets, family firms need to make use of internal and external information movements, to be able to build knowledge-based advantage over their competitors (Lam et al., 2016; Weimann et al., 2020). Prior studies suggest that, firms’ exposure to external knowledge sources can be considered an effective antecedent of absorptive capacity, and the diversity of these sources can significantly enhance their acquisition and assimilation capabilities (Moilanen et al., 2014; Zahra and George, 2002). In this context, the use of social media tools appears as a valuable means to foster knowledge exchange both inside and across family firm boundaries, enhancing also organizational learning. These platforms facilitate family firm’s interactions with their stakeholders (customers, suppliers, partners), as they have become a suitable environment to share information, collaborate and build relationships (Palacios-Marques et al., 2015). Consequently, social media use is going to play a key role in building absorptive capacities in firms (Ooms et al., 2015). In this vein, Schlagwein and Hu (2017) conducted an extensive analysis of the social media literature and conclude that the use of these platforms effectively increases an organization’s absorptive capacity. First, social media use supports the family business’ ability for exploratory learning (understanding and acquiring external knowledge), as it allows to take up market information and patrol user-generated content more quickly and effectively. Second, social media also enhances transformative learning (interpreting and assimilating knowledge) because it fosters crowdsourcing processes and can help to leverage collective intelligence for the organization. And finally, these authors indicate that social media may also support the family firm’ ability for exploitative learning, allowing new business applications or business processes to be created more effectively. In this vein, it has been stated in prior literature that social media use enhances absorptive capacity in family firms. Scuotto et al. (2017) examining a sample of knowledge-intensive and labour-intensive SMEs, confirmed that the use of social networking platforms exerted a positive influence on the absorptive capacity of those family business. Moreover, Ooms et al. (2015) also explored the topic in a qualitative way, through explorative case studies conducted in high tech companies. Their results note that social media can be considered boundary-spanning tools, and show how their 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 indicate appropiate reliability in the prior phases of research and values higher as 0.8 or 0.9 would be used in more advanced phases of the research (Nunnally, 1978), which are higher than the most usual values. As Fornell and Larcker (1981) argues, the score of average variance extracted (AVE) is a measure of unidimensionality. Finally, Fornell and Larcker’s criterion provides evidence of discriminant validity of reflective constructs (i.e. Mode A composite) (Hair et al, 2014). The path is very important indicator in the structural model, and it is considered the most important result. Bootstrap percentile confidence intervals help in the generalisation from sample to population. (Cohen, 1988; Aguirre-Urreta and Ronkko, 2018). 4. Results 4.1 Measurement model On the measurement model, the results indicate that all the requirements usually established are checked. First, because all the value of standardized loadings (Mode A composites) are greater than 0.7 (Table 1) and therefore, the individual items are reliable. Second, all the consistent measures of model are greater than 0.8 (Table 1), this model meets the prerequisite of construct reliability. Additionally, the value of AVE (average variance extracted) exceed the limit of 0.5 (Table 1) for composites unidimensionality, and these latent variables therefore achieve convergent validity. Table 2 shows the weights and significance of the Mode B composite’s indicators (social media use). Finally, all the Mode A composites attain discriminant validity, as the table of Fornell and Larcker criterion indicates (Table 3). Table 1: Indicators loadings of Mode A composites Constructs AC OI AC 0,912 AS 0,910 KE 0,938 KT 0,930 OI1 0,848 OI2 0,853 OI3 0,781 OI6 0,762 Mean 5,99 6,13 SD 1,17 1,01 CA 0,942 0,827 rho_A 0,943 0,833 CR 0,958 0,885 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 AVE 0,851 0,659 Notes: Mean = the average score for all of the items included in this measure; S.D. = standard deviation; CA = Cronbach’s alpha; CR = composite reliability; AVE = average variance extracted Table 2: Indicators weights and significance of Mode B composite Social Media Use Weights t-value p-value SM1 0,305 1,783 0,075 SM2 0,247 1,658 0,097 SM3 -0,065 0,642 0,521 SM4 0,145 1,813 0,070 SM5 -0,148 2,044 0,041 SM6 0,443 4,079 0,000 SM7 -0,169 2,338 0,019 Notes: The significance of the weights was carried out through a two-tail’s bootstrap procedure of 5,000 subsamples Table 3: Fornell-Larcker’s criteria Constructs AC OI SM AC 0,923 OI 0,787 0,812 SM 0,756 0,840 n.a. Notes: Diagonal entries are the square root of the average variance extracted. Off-diagonal elements are correlations among constructs 4.2 Structural model The use of bootstrapping (5,000 resamples) generates standard errors and the value of t-statistics serve to assess the statistical significance of the path coefficients (Henseler et al, 2009). The percentile bootstraps at the 95% confidence interval are presented in table 4, where is possible that all the direct and indirect effects are supported. Figure 2 presents the final estimated model. Figure 2: Proposed research model 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 The results show that the social media use is an antecedent of open innovation (H1) and absorptive capacity (H2), and therefore, the family firms that usually use social media to connect with their customer and stakeholders, they probably are more oriented to develop open innovation practices and absorption capacity tasks. The results also show when a family firm make absorption capacity tasks they probably could develop open innovation practices (H3) and to reach better performance. These results confirm the proposed direct relationships, and the H1, H2 and H3 are supported according to prior studies. The study has also researched the indirect effect and it has been proposed the hypothesis 4 (H4), as a mediating effect of the absorptive capacity in the link between social media and open innovation. As Figure 2 and Table 4 show, the indirect effect of the social media on open innovation, via absorptive capacity is significant. In the research model, both the direct (0,573) and indirect (0,267) effect of SM and OI are significant. This means that exists mediator effect and H4 is supported. The type of mediation is partial, because both the indirect and direct effect are significant. (Nitzl et al, 2016; Cepeda-Carrion et al, 2017). In addition, the partial mediation is the type complementary because the direct effect (0,573) and indirect effect (0,267) point in the same (positive) direction. It indicates that a portion of the effect of SM on OI is mediated through absorptive capacity, while social media use still explains a portion of open innovation that is independent of the absorptive capacity. (Nitzl et al, 2016; Cepeda-Carrion et al, 2017). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 Table 4. Construct effects on endogenous variables (incl. lower and upper limits of 95% confidence interval) Effects on endogenous variables Path coefficient Confidence intervals (95%) Significance of effect (p-value) R2 of dependent construct 5%CIlo 95%CIhi SM  OI (H1) 0,573 0,409 0,806 Yes (0,001) 0,759 SM AC (H2) 0,756 0,693 0,852 Yes (0,000) 0,572 AC OI (H3) 0,354 0,099 0,527 Yes (0,000) SM ACOI (H4) 0,267 -0,081 0,404 complementary partial mediation Note: SM: social media use; OI: open innovation practices; AC: absorptive capacity 5. Discussion This study employed a quantitative approach which enables understanding better the specific impact of social media use on open innovation, exploring the mediating mechanism of absorptive capacity in this relationship. Since social media is not only the result of real-time news and using press releases, but it may also be the result of using unproven rumours, colloquial expressions or sayings (Cegarra-Sánchez et al., 2018; Echajari & Thomas, 2015; Thompson, 2008), the result from this research provided an opportunity to reflect on Gruner and Power (2018) findings of social media activity. They found out that in some cases, social media activity negatively affects a firm’s marketing activity. One possible explanation this study offers for these findings is the fact that despite social media is helpful for establishing two-way communication between communities and organizations (Ngai et al., 2015; Stankovic-Rice, 2012), it is no less true that it can also manipulate information and generate misinformation (Sánchez-Casado, Cegarra-Navarro, & Tomaseti-Solano, 2015). The findings of this study contribute to the current literature on social media, intended to be considered both together and separately in two important ways. First, the findings of this study contribute to expand what is known about the relationship between the use of social media and absorptive capacity. Results suggest that the use of social media is exogenous to absorptive capability. Second, results provide support for the theoretical proposition on the importance of absorptive capacity for contrasting and filtering external information (e.g. Costa & Monteiro, 2016; Nätti, Hurmelinna-Laukkanen, & Johnston, 2014; Zahra & George, 2002). Therefore, and considering that the relationship between the use of social media and open innovation remains unclear (Torres de Oliveira et al., 2019), our findings shed lights on the topic, in the specific context of family firms. In this 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 vein, while not all the external information provided by the social media needs to be channelled (hypothesis 1), a portion of the external information received from social media needs to be filtered and adapted to the company context (hypotheses 2 and 3). Moreover, this investigation also contribute of family firms literature, and it is consistent with the prior literature in family firms (Chaudhary and Batra, 2018), and has revealed that to reach sustainable competitive advantages, family businesses need to adequately combine and reconfigure their existing base of knowledge with new knowledge through interaction with the outside of firm, such as with social media users. Regarding the first hypothesis, the results support that the higher the use of social media is, the more likely to benefit from the opening of new innovations. These results confirm the importance of social media for acquiring external information, which in turn can help companies gain more innovative opportunities in the family business. As Nambisan et al. (2017) highlighted, those digital platforms allow different collectives to openly collaborate, fostering knowledge sharing and crowdsourcing among them. This is fundamentally changing the way family firms innovate, shaping the scope and direction of the innovation processes. These findings are consistent with prior literature that suggest a facilitating role of social media tools on innovation (De Zubielqui et al., 2019; Mount and Garcia, 2014; Pérez-González et al., 2017). The second hypothesis concerning the relationship between the use of social media and absorptive capacity was also confirmed. Findings show that the higher the use of social media, the more likely a company is to absorb external knowledge. Thus, the use of social media tools is going to support organizational learning abilities of the family firms to acquire, assimilate, transform and exploit external knowledge into the firms’ operations (Schlagwein and Hu, 2017). Consistent with Ooms et al., (2015), results suggest that social media can be considered boundary-spanning tools, which enable multi-directional interactions and are going to play a key role on building absorptive capacity. In other words, the closer the company is to the network with social media communities, the more opportunities it has to access diverse information to initiate knowledge exchange with other stakeholders and innovators (Ooms et al., 2015). Regarding the third hypothesis, results demonstrate how absorptive capacity appears as a key antecedent of open innovation practices. Thus, results support prior studies in the area which indicated that absorptive capacity is a key antecedent of innovation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 activities (García-Morales et al., 2007; Cepeda-Carrión et al., 2012; Leal-Rodríguez et al., 2014). Therefore, results confirm that to make full use of the external information captured via social media, family firms need to have established appropriate organizational processes and routines to transform this external information into knowledge that reflects more effective products and services. This finding emphasized the role of absorptive capacity as an important condition to transforming external information into real innovations, highlighting also the relevance of knowledge application and transformation in this process (Moilanen et al., 2014). The results support the hypothesis that absorptive capacity also mediates the impact of social media use on open innovation (hypothesis 4). A possible explanation for these findings may relate to the fact that only a part of the external media information is valuable in itself (Thompson, 2008), another part needs to be filtered, updated and adapted in order to respond to current company needs (Sánchez-Casado et al., 2015a). For example, absorptive capacity may allow family business to capture the right knowledge behind spam and fake news (Cegarra-Navarro, Eldridge, & Wensley, 2014), which in turn can lead to make effective decisions on how to innovate (Martinez, Lazzarotti, Manzini, & García, 2014). We think this is an important contribution because were managers to innovate and seize opportunities, they could not be sure that the use of social media is enough to satisfy new society demands. In fact, they should consider that the use of social media may be most usefully considered in combination with absorptive capacity. The characteristics of family firms such as family members' unwillingness to lose control (e.g., Gómez-Mejía, Takács Haynes, Núñez-Nickel, Jacobson, & Moyano- Fuentas, 2007), the resource constraints shaped by their governance structures and size (e.g., Carney, 2005), the distinctive aspects of their social capital (e.g., Arregle, Hitt, Sirmon, & Very, 2007), and long-term orientation (Miller & Le Breton-Miller, 2005), contribute the collaborative innovation offered by social media can be a highly effective means of overcoming barriers to innovation and an important source of competitive advantage for innovation in family firms (De Mattos, Burgess, & Shaw, 2013; Feranita, Kotlar & De Massis, 2017; Hitt et al. , 2000; Sirmon, Arregle, Hitt, & Webb, 2008). Thus, the results of the study offer relevant implications for managers in the family firms, showing the pathway they need to follow to leverage social media use to become more innovative and therefore more likely to reach competitive advantage and improve 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 the performance. Results suggest that family firms should strategically use these tools to connect with different stakeholders to become more open to the environment, more responsive and capture also valuable ideas to develop new products and services which meet customers requirements. In addition, absorptive capacity appears as essential and necessary in order to make external knowledge available in a timely and complete manner. Consequently, to take advantage of all the potential that social media use can brings in this area, family firms need to develop specify organizational routines and an appropriate culture to foster absorptive capacity. Our paper suggests that managers should foster an appropriate culture of learning in their firms and provide specific training to develop the staff ability to acquire, integrate and use information captured in digital platforms. Additionally, in order to leverage the potential of this information, it is necessary to establish adequate communication processes and systems, to share this information across the firm and to use it to improve customer experience and generate new service ideas. Due to the fact that family businesses seek continuity in their business and tend to have a long-term orientation, knowledge management across generations becomes a requirement for family businesses. (Moss et al., 2014; Chaudhary and Batra, 2018) for the innovation and improve the performance. 6. Conclusions, limitations and future research Based on the above discussion, the paper offers two valuable contributions to the literature. First, this research provides empirical evidence of the real impact of social media use in enhancing Open Innovation practices. Results demonstrate that these tools offer a valuable communication channel to connect with key stakeholders, like customers, supplier or business partners, and collaborate with them to develop new products and services. In current turbulent markets, with the current covid19 pandemic crisis, the capacity to innovate help family firms to quickly respond to market changes, so it has become a key driver of competitiveness. For example, the case of companies in the hospitality sector and how they must be able to do things differently and innovate in their business models, operations, products, and services (delivery services) so that they can continue to stay in the market and achieve sustainable competitive advantages. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 Considering that empirical research on the specific impact on social media use on innovativeness remains scarce, particularly in a service context in family firms, the findings of this study complements the existing literature and provide a basis for future studies. According to our results, social media tools appear as a basic enabler of open innovation, as allow family firms to create and capture valuable knowledge involving different stakeholders in the innovation process. Second, findings confirm the key role played by absorptive capacity in this process. Results empirically demonstrate that, to fully benefit from external knowledge captured via social media, family firms need to possess specific organizational processes to acquire and assimilate external knowledge and need also to have implemented specific routines to exploit this knowledge and transform it into new service ideas. Consequently, absorptive capacity emerges as a necessary condition to leverage external knowledge captured via social media to enhance open innovation activities. Finally, we acknowledge that this study presents some limitations, which could be addressed in future research. First, the analysis was based on cross-sectional data. As social media use and innovation are dynamic phenomenon in nature, a longitudinal analysis would be helpful to enrich the findings. Second, a key-informant method was used, and we draw on manager’ perception for data collection. 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