Electronic commerce adoption, entrepreneurial orientation and small- and medium-sized enterprise (SME) performance

Abstract

Purpose – This study aims to contribute to the literature by addressing two research questions: is there a relationship between e-commerce adoption and performance of SMEs? And, more importantly, does the degree of entrepreneurial orientation moderate the relationship between e-commerce adoption and SME performance? Design/methodology/approach – Data were collected from a sample of 55 manufacturing and service SMEs located in the state of Texas, USA, between 2008 and 2009 using a structured questionnaire. Customized questionnaires were mailed out to the owner-managers of 55 SMEs. A moderated regression analysis was conducted to test the two hypotheses. Findings – The results suggest that e-commerce adoption has a significant, positive influence on SMEs' average sales growth rate and that adopters of e-commerce technology have significantly higher average sales growth rate than non-adopters. The results also indicate that e-commerce adoption positively affects SMEs' annual sales growth rate even more when the sample firms have higher level of entrepreneurial orientation. Overall, the results of this analysis indicate the importance of e-commerce adoption as well as SMEs' entrepreneurial orientation on the performance of SMEs. Research limitations/implications – The findings of this study can be useful for SMEs in general as a means of understanding how e-commerce adoption positively affects the firm's performance. Such a relationship suggests that e-commerce adoption is an important factor that can enhance firm's internal processes and ultimately performance. Therefore, e-commerce adopters should continue to utilize this technology while non-adopters should consider harnessing the potential of this technology to further streamline their operations and effectiveness. Originality/value – This study contributes to the literature by providing empirical evidence on the role of e-commerce adoption and entrepreneurial orientation in small firm performance.