The Effects of Social Media on Entrepreneurial Opportunity Recognition and Innovation: Mediating Role of Self-efficacy and Cultural Intelligence

Despite the vital role of innovation and entrepreneurship in the modern economy, there are scant studies on the impact of social media on these factors. This study, thus, aimed to investigate the effect of social media usage on entrepreneurial opportunity recognition and innovation by explaining the mediating role of cultural intelligence. Data were collected randomly using standard questionnaires and then analyzed with SPSS and SMART PLS. This study employed the structural equation modeling (SEM) by applying the partial least squares (PLS) to a sample from 147 Internet-based companies in Tehran. The findings suggested that cultural intelligence mediates the relationship between social media usage for information and social media usage for socializing with entrepreneurial opportunity recognition. In contrast, the effect of social media usage for information on self-efficacy was greater than that of the social media usage for socializing.. Moreover, opportunity recognition has a significant direct effect on innovation and is thus regarded as the most important engine of innovation. This study focused on the cognitive and learning processes and used the concepts of social media and cultural intelligence as stimuli to entrepreneurship and innovation, so as to bring new insights into the entrepreneurial opportunity recognition literature.