Impact of e-commerce adoption on the business performance of SMEs in Saudi Arabia

Commerce

The purpose of this paper is to analyses whether the adoption of e commerce improves company business performance and whether business size and e-commerce experience might moderate this relationship. We have used resource-based-view of a firm to provide the theoretical underpinning to understand how e-commerce adoption is linked to firm performance. We have conducted a survey and obtained 100 usable responses from Saudi Arabian SMEs. The research is based on a survey within the SMEs industry and a regression model investigating the relationships between e commerce and performance. We first verified our variables to check e-commerce using confirmatory factor analysis. We then identified their influence on performance using regression. Finally, we verified the roles of business size and e-commerce experience using moderated regression analysis. Our results show that e-commerce have strong impacts on performance of SMEs. Size of SMEs, measured using number of employees and sales growth, moderates the impacts of e-commerce adoption aspects on performance, while e-commerce experience, measured using the length of time SMEs and level of experience in e-commerce, does not moderate. This paper offers an original analytical approach to identifying the relationships between a company’s adoption of e-commerce, performance and business size and e-commerce experience within the retail industry.

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