Nigerian service companies could unlock greater corporate value by strengthening their social media marketing and adopting more structured investor-relations strategies, a new study by researcher Akinbowale Adebusola has found.
The research, conducted among 22 service companies listed on the Nigerian Exchange Group (NGX), examined responses from 392 top management executives and established a strong statistical relationship between social media marketing, investor relations and corporate value creation.
According to the study, the combined variables explained approximately 72 per cent of the variation in corporate value creation. When firm size was introduced as a control variable, the explanatory power of the model rose to about 74.7 per cent.
Akinbowale, a doctoral researcher in the Department of Accounting at Babcock University, said the findings demonstrated that social media had moved beyond its traditional role as a promotional platform.
She noted that digital platforms were increasingly becoming important channels through which companies communicate with customers, investors and other stakeholders, making social media strategy an increasingly relevant component of corporate management.
One of the strongest variables identified in the research was Social Media Advertising (SMAD), which recorded standardised beta coefficients ranging from 0.344 to 0.507 across the regression models examined.
The study assessed corporate value using several indicators, including market share price, asset growth, earnings per share, market capitalisation and economic value added.
“Market Share Price recorded the highest explanatory power, with an adjusted R-squared value of 0.67, followed by Asset Growth at 0.54 and Earnings Per Share at 0.50.
“Market Capitalisation recorded an adjusted R-squared value of 0.34, while Economic Value Added stood at 0.31.”
Size matters
An important finding from the research was the role of company size in determining the strength of the relationship between digital marketing and corporate value.
Akinbowale found that firm size had a statistically significant negative moderating effect. This suggests that larger organisations may not necessarily obtain the same level of benefit from social media marketing as smaller and more agile companies.
The finding points to a possible competitive advantage for medium-sized businesses that are able to respond more quickly to changes in digital trends, consumer preferences and audience behaviour.
For such companies, the ability to make faster decisions and adapt digital campaigns could become an important tool for improving engagement and strengthening their position in an increasingly competitive market.
Investor relations
Beyond social media marketing, the study also highlighted the importance of structured investor relations in improving corporate communication and building stakeholder confidence.
Effective investor relations can provide companies with a more organised way of communicating financial information, corporate developments and strategic decisions to shareholders and potential investors.
For listed companies operating in Nigeria's service sector, the research suggests that combining digital engagement with transparent and structured investor communication could strengthen relationships with the market and other stakeholders.
The study comes at a time when Nigerian businesses are increasingly turning to digital platforms to build brand visibility, engage consumers, communicate corporate messages and manage their reputations.
However, the researcher cautioned against interpreting the statistical findings as proof that social media spending alone causes an increase in corporate value.
Rather, the findings demonstrate a significant association between the digital marketing and investor-relations variables examined and different measures of corporate value.
Implications for corporate leaders
The research involved executives with more than 10 years of operational experience and achieved a reported response rate of 98.5 per cent.
The research team also tested the reliability of its measurement instruments, recording Cronbach's alpha values ranging from 0.87 to 0.95.
For corporate boards, chief financial officers, marketing executives and investor-relations professionals, the findings underline the need to view digital communication as part of wider corporate strategy rather than as a peripheral promotional activity.
As businesses compete for customers, investors and public confidence, the study suggests that companies capable of integrating social media engagement with effective investor communication may be better positioned to strengthen stakeholder relationships and pursue long-term value creation.
Akinbowale's research therefore adds to the growing body of evidence that corporate communication in Nigeria is changing, with digital platforms increasingly becoming part of the tools companies use to influence visibility, engagement and ultimately their relationship with the market.