LAUSR

Abstract Despite the importance of institutional factors in adopting new technologies, the role of these drivers in the use of social media technology (SMT) to strengthen customer relationship management (CRM) capabilities and improve company performance has not yet been investigated. First, drawing from institutional theory and capabilities theory, we analyze the influence of customer coercive pressure and competitor mimetic pressure on SMT use. Second, we investigate the mediator role of CRM capabilities in the relationship between SMT use and firm performance. The study's results reveal that both institutional factors drive SMT use, their effects varying according to the size of the firm, its innovativeness, the sector and the market in which it operates. CRM capabilities were found to only indirectly mediate the relationship between SMT use and firm performance. From the study results, we derive managerial recommendations for the effective use of SMT.