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Determining factors for the adoption of e-business: the case of SMEs in Korea

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  • Bang Nam Jeon
  • Kyeong Seok Han
  • Myung Jin Lee

Abstract

This study investigates the determining factors of the successful adoption of e-business by small and medium enterprises (SMEs) in Korea using survey data. After the major determining factors were identified from the innovation adoption literature and were extracted by applying the principal component analysis to the survey data and by adding the country-specific characteristics of Korea, we conducted empirical analyses to determine the critical success factors for the adoption of e-business by Korean firms. The empirical results which are based on t-tests of the differences between adopters and non-adopters, the linear probability model, and the logit model, all suggest that the important determinants of the successful adoption of e-business by SMEs in Korea are: the CEO's knowledge of information technology (IT)/e-business, relative advantages and benefits from implementing e-business, governmental support, globalization strategy and the North Korean factor. Business size, the cost of e-business adoption and competitive pressure of the industry do not seem to play an important role in the adoption of e-business by Korean SMEs. The policy implications of this study on promoting e-business adoption by SMEs in emerging economies, such as Korea, are also discussed.

Suggested Citation

  • Bang Nam Jeon & Kyeong Seok Han & Myung Jin Lee, 2006. "Determining factors for the adoption of e-business: the case of SMEs in Korea," Applied Economics, Taylor & Francis Journals, vol. 38(16), pages 1905-1916.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:16:p:1905-1916
    DOI: 10.1080/00036840500427262
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    5. Kurnia, Sherah & Choudrie, Jyoti & Mahbubur, Rahim Md & Alzougool, Basil, 2015. "E-commerce technology adoption: A Malaysian grocery SME retail sector study," Journal of Business Research, Elsevier, vol. 68(9), pages 1906-1918.
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    9. Sangho Lee & Cheolho Yoon, 2022. "Factors of the Adoption of O2O Service Platforms: Evidence from Small Businesses in Korea," Sustainability, MDPI, vol. 14(23), pages 1-18, November.
    10. Monica Răileanu Szeles & Mihaela Simionescu, 2020. "Regional Patterns and Drivers of the EU Digital Economy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 150(1), pages 95-119, July.
    11. Oleg S. Mariev & Karina M. Nagieva & Viktoria L. Simonova, 2020. "Managing innovation activity factors in Russian regions through econometric modeling," Upravlenets, Ural State University of Economics, vol. 11(1), pages 57-69, March.
    12. Mohamed Saleh Abd AL Khuja & ZainalAbidin Bin Mohamed, 2016. "Investigating the adoption of E-Business Technology by Small and Medium Enterprises," Journal of Administrative and Business Studies, Professor Dr. Usman Raja, vol. 2(2), pages 71-84.
    13. Mohamed Kossaï & Maria Luiza Lapa Souza & Younes Ben Zaied & Pascal Nguyen, 2020. "Determinants of the Adoption of Information and Communication Technologies (ICTs): the Case of Tunisian Electrical and Electronics Sector," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(3), pages 845-864, September.
    14. Martin Prause, 2019. "Challenges of Industry 4.0 Technology Adoption for SMEs: The Case of Japan," Sustainability, MDPI, vol. 11(20), pages 1-13, October.
    15. Almaaf Bader Ali A & Jian-Jun Miao & Quang Dung Tran, 2018. "Study on E-Commerce Adoption in SMEs Under the Institutional Perspective: The Case of Saudi Arabia," International Journal of E-Adoption (IJEA), IGI Global, vol. 10(1), pages 53-72, January.
    16. Saffira Annisa Bening & Muhammad Dachyar & Novandra Rhezza Pratama & Jaehyun Park & Younghoon Chang, 2023. "E-Commerce Technologies Adoption Strategy Selection in Indonesian SMEs Using the Decision-Makers, Technological, Organizational and Environmental (DTOE) Framework," Sustainability, MDPI, vol. 15(12), pages 1-25, June.
    17. Gianluca Vagnani & Corrado Gatti & Luca Proietti, 2019. "A conceptual framework of the adoption of innovations in organizations: a meta-analytical review of the literature," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(4), pages 1023-1062, December.
    18. Yunhee Kim & Jae Young Choi & Yeonbae Kim, 2011. "Complementarity and contextuality in the adoption of information systems," Applied Economics Letters, Taylor & Francis Journals, vol. 18(16), pages 1613-1618.
    19. Dorel Mihai Paraschiv & Adrian Cantemir Calin & Oana Cristina Popovici & Gerard Cazabat, 2019. "A Contemporaneous Statistical Note on E-Commerce Adoption in Romania – Based SMEs," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 21(50), pages 177-177, February.
    20. Lorente-Martínez, Javier & Navío-Marco, Julio & Rodrigo-Moya, Beatriz, 2020. "Analysis of the adoption of customer facing InStore technologies in retail SMEs," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    21. Ganotakis, Panagiotis & D'Angelo, Alfredo & Konara, Palitha, 2021. "From latent to emergent entrepreneurship: The role of human capital in entrepreneurial founding teams and the effect of external knowledge spillovers for technology adoption," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    22. Rashid Khalil* & Dr. Mohd. Sollehudin Bin Shuaib & Dr. Suhaimi Bin Ishak, 2018. "Bank-SMEs Relationship: A Critical Review of Firm & Industry Specific Determinants Influencing Banks’ Performance," The Journal of Social Sciences Research, Academic Research Publishing Group, vol. 4(12), pages 777-791, 12-2018.
    23. Cheolho Yoon, 2023. "Factors Affecting the Adoption of Digital Marketing in Non-Profit Organizations: An Empirical Study," Administrative Sciences, MDPI, vol. 14(1), pages 1-15, December.
    24. Mohammad Anisur Rahman & Xu Qi & Mohammad Shahfayet Jinnah, 2016. "Factors affecting the adoption of HRIS by the Bangladeshi banking and financial sector," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1262107-126, December.

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