Abstract:
Globalization and digitization have brought about new challenges and opportunities for
Small and Medium-sized Enterprises (SMEs). Many SMEs have turned to social media to
reach a larger audience and build better relationships with potential and existing customers.
Despite the challenges posed by the end of the civil war in 2009 and the COVID-19 pandemic,
many people from the Northern Province, especially in Jaffna, have started SMEs that rely on
virtual and physical markets for business survival. The results from this study confirmed that
the technological factor significantly directly influences the SME's performance in Jaffna.
The results also revealed that social media adoption significantly influences SMEs'
performance. Further, employing the TOE framework, this study evidenced that relative
advantage, cost-effectiveness, compatibility, interactivity, entrepreneurial orientation, and
customer pressure significantly influence social media adoption. In contrast, top management
support and competitive pressure have an insignificant influence. This implies that SMEs in
Jaffna strengthen the relationship between social media and SMEs' performance. The most
common social media platforms firms use are Facebook and WhatsApp; both were considered
cost-effective. The speed, ease of use, interactive nature, and ability to reach a large numbers
of customers make social media essential for SMEs in developing countries. Against the
backdrop of continuous debate on the advantages and disadvantages of Social Media adoption
by SMEs in developing countries, this research offers a comprehensive view of important
aspects, allowing owners, executives, and managers to understand the actual significance of
Social Media. This work facilitates their understanding of how the effective administration of
Social Media adoption can improve SME performance in several aspects.
