IDEAS home Printed from https://ideas.repec.org/a/spr/elcore/v25y2025i3d10.1007_s10660-023-09755-9.html
   My bibliography  Save this article

Online or not online: the impact of business owner’s risk preference on the adoption of e-business

Author

Listed:
  • Wei Yang

    (Lincoln University
    NIWA - The National Institute of Water and Atmospheric Research Ltd)

  • Le Wang

    (Lincoln University)

  • Xian Zhang

    (Yunnan Agriculture University)

Abstract

The significant growth of internet users has driven businesses to develop their capacity in e-commerce and meet the increasing demand for e-consumption, e-services, and e-business. To gain the benefits of e-business, firms may choose to extend or transit their offline-operated businesses to online or hybrid modes. Opportunities are accompanied by risks in this process. Therefore, it is important to understand how business owners’ financial risk preferences affect their choice of business operation models, namely, online and offline operations. Using data from the China Household Finance Survey (CHFS) in 2017 and 2019, this study examined the impacts of business owners’ risk preferences on e-business adoption, considering social insurance as a moderator on the relationship between risk effect and online business operation. In addition, we used heterogeneity examination to test for regional differences between rural and urban areas. Our results show that, compared to high-risk takers, low-risk takers are less likely to choose online or hybrid businesses; and having social insurance reduces the effect of risk preference on adopting e-business. This finding indicates social insurance may provide financial security to business owners with low-risk preferences and makes them more likely to adopt online business, whilst it may distort adoption incentives for high- and medium-risk groups. Results of the heterogeneity examination suggest a discrepancy in the risk preference effect on the adoption of e-business between the rural and urban areas: the impact of risk preference is found to be significantly higher on businesses in the rural area than those in the urban area.

Suggested Citation

  • Wei Yang & Le Wang & Xian Zhang, 2025. "Online or not online: the impact of business owner’s risk preference on the adoption of e-business," Electronic Commerce Research, Springer, vol. 25(3), pages 1375-1394, June.
    • Handle: RePEc:spr:elcore:v:25:y:2025:i:3:d:10.1007_s10660-023-09755-9
    DOI: 10.1007/s10660-023-09755-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10660-023-09755-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10660-023-09755-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hilbert, Martin, 2016. "The bad news is that the digital access divide is here to stay: Domestically installed bandwidths among 172 countries for 1986–2014," Telecommunications Policy, Elsevier, vol. 40(6), pages 567-581.
    2. Shi, Xiaojun & Yan, Zhu, 2018. "Urbanization and risk preference in China: A decomposition of self-selection and assimilation effects," China Economic Review, Elsevier, vol. 49(C), pages 210-228.
    3. Maduku, Daniel K. & Mpinganjira, Mercy & Duh, Helen, 2016. "Understanding mobile marketing adoption intention by South African SMEs: A multi-perspective framework," International Journal of Information Management, Elsevier, vol. 36(5), pages 711-723.
    4. Ert, Eyal & Haruvy, Ernan, 2017. "Revisiting risk aversion: Can risk preferences change with experience?," Economics Letters, Elsevier, vol. 151(C), pages 91-95.
    5. Rickne, Johanna, 2013. "Labor market conditions and social insurance in China," China Economic Review, Elsevier, vol. 27(C), pages 52-68.
    6. Qamar Farooq & Peihua Fu & Shahzad Ahmad & Yanni Zhang & Yunhong Hao, 2019. "Assessing Human Factor in the Adoption of Computer-Based Information Systems as the Internal Corporate Social Responsibility," SAGE Open, , vol. 9(3), pages 21582440198, August.
    7. Martins, Carolina & Oliveira, Tiago & Popovič, Aleš, 2014. "Understanding the Internet banking adoption: A unified theory of acceptance and use of technology and perceived risk application," International Journal of Information Management, Elsevier, vol. 34(1), pages 1-13.
    8. Harless, David W & Camerer, Colin F, 1994. "The Predictive Utility of Generalized Expected Utility Theories," Econometrica, Econometric Society, vol. 62(6), pages 1251-1289, November.
    9. Hong Chen & Ling Li & Yong Chen, 2021. "Explore success factors that impact artificial intelligence adoption on telecom industry in China," Journal of Management Analytics, Taylor & Francis Journals, vol. 8(1), pages 36-68, January.
    10. Schoemaker, Paul J H, 1982. "The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 529-563, June.
    11. Julian Marius Müller & Daniel Kiel & Kai-Ingo Voigt, 2018. "What Drives the Implementation of Industry 4.0? The Role of Opportunities and Challenges in the Context of Sustainability," Sustainability, MDPI, vol. 10(1), pages 1-24, January.
    12. Whinston, Michael D., 1983. "Moral hazard, adverse selection, and the optimal provision of social insurance," Journal of Public Economics, Elsevier, vol. 22(1), pages 49-71, October.
    13. Ying Zhang & Anni Su & Xiaoxing Liu & Yue Zhang, 2018. "Social health insurance vs private health insurance in China: Revisit crowd‐out effect based on a multiple mediation analysis," International Journal of Health Planning and Management, Wiley Blackwell, vol. 33(4), pages 996-1012, October.
    14. Adnan Mustafa AlBar & Md. Rakibul Hoque, 2019. "Factors affecting the adoption of information and communication technology in small and medium enterprises: a perspective from rural Saudi Arabia," Information Technology for Development, Taylor & Francis Journals, vol. 25(4), pages 715-738, October.
    15. Barham, Bradford L. & Chavas, Jean-Paul & Fitz, Dylan & Salas, Vanessa Ríos & Schechter, Laura, 2014. "The roles of risk and ambiguity in technology adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 204-218.
    16. Eliason, Marcus & Johansson, Per & Nilsson, Martin, 2019. "Forward-looking moral hazard in social insurance," Labour Economics, Elsevier, vol. 60(C), pages 84-98.
    17. Patrick S. Ward & Vartika Singh, 2015. "Using Field Experiments to Elicit Risk and Ambiguity Preferences: Behavioural Factors and the Adoption of New Agricultural Technologies in Rural India," Journal of Development Studies, Taylor & Francis Journals, vol. 51(6), pages 707-724, June.
    18. Li, Jie & Wu, Yu & Xiao, Jing Jian, 2020. "The impact of digital finance on household consumption: Evidence from China," Economic Modelling, Elsevier, vol. 86(C), pages 317-326.
    19. Erin Cottle Hunt & Frank N. Caliendo, 2022. "Social security and risk sharing: A survey of four decades of economic analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 36(5), pages 1591-1609, December.
    20. Elke U. Weber & Richard A. Milliman, 1997. "Perceived Risk Attitudes: Relating Risk Perception to Risky Choice," Management Science, INFORMS, vol. 43(2), pages 123-144, February.
    21. Van de Venter, Gerhard & Michayluk, David & Davey, Geoff, 2012. "A longitudinal study of financial risk tolerance," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 794-800.
    22. Rebecca Albrecht & Jana B. Jarecki & Dominik S. Meier & Jörg Rieskamp, 2021. "Risk preferences and risk perception affect the acceptance of digital contact tracing," Palgrave Communications, Palgrave Macmillan, vol. 8(1), pages 1-9, December.
    23. Duan, Wei & Shen, Jinyu & Hogarth, Nicholas J. & Chen, Qian, 2021. "Risk preferences significantly affect household investment in timber forestry: Empirical evidence from Fujian, China," Forest Policy and Economics, Elsevier, vol. 125(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Srivastava, Deepak Kumar & Kumar, Vikas & Ekren, Banu Yetkin & Upadhyay, Arvind & Tyagi, Mrinal & Kumari, Archana, 2022. "Adopting Industry 4.0 by leveraging organisational factors," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    2. Pace, Noemi & Daidone, Silvio, 2024. "Impact of development interventions on individual risk preferences: Evidence from a field-lab experiment and survey data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 111(C).
    3. Freudenreich, Hanna & Musshoff, Oliver & Wiercinski, Ben, 2017. "The Relationship between Farmers' Shock Experiences and their Uncertainty Preferences - Experimental Evidence from Mexico," GlobalFood Discussion Papers 256212, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    4. Nagisa Shiiba & Hide-Fumi Yokoo & Voravee Saengavut & Siraprapa Bumrungkit, 2023. "Ambiguity Aversion And Individual Adaptation To Climate Change: Evidence From A Farmer Survey In Northeastern Thailand," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 1-29, February.
    5. Mohan, Sarah, 2020. "Risk aversion and certification: Evidence from the Nepali tea fields," World Development, Elsevier, vol. 129(C).
    6. Katarzyna Kochaniak & Paweł Ulman, 2020. "Risk-Intolerant but Risk-Taking—Towards a Better Understanding of Inconsistent Survey Responses of the Euro Area Households," Sustainability, MDPI, vol. 12(17), pages 1-26, August.
    7. Sara Jonsson & Inga-Lill Söderberg, 2018. "Investigating explanatory theories on laypeople’s risk perception of personal economic collapse in a bank crisis – the Cyprus case," Journal of Risk Research, Taylor & Francis Journals, vol. 21(6), pages 763-779, June.
    8. Helga Fehr-Duda & Thomas Epper, 2012. "Probability and Risk: Foundations and Economic Implications of Probability-Dependent Risk Preferences," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 567-593, July.
    9. Amanuel Hadera & Tewodros Tadesse, 2023. "Risk and ambiguity aversion: Incentives or disincentives for adoption of improved agricultural land management practices?," Agricultural Economics, International Association of Agricultural Economists, vol. 54(6), pages 867-883, November.
    10. Necker, Sarah & Ziegelmeyer, Michael, 2016. "Household risk taking after the financial crisis," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 141-160.
    11. Gars, Jared & Ward, Patrick S., 2019. "Can differences in individual learning explain patterns of technology adoption? Evidence on heterogeneous learning patterns and hybrid rice adoption in Bihar, India," World Development, Elsevier, vol. 115(C), pages 178-189.
    12. James Andreoni & Charles Sprenger, 2011. "Uncertainty Equivalents: Testing the Limits of the Independence Axiom," NBER Working Papers 17342, National Bureau of Economic Research, Inc.
    13. Freudenreich, H., 2018. "Explaining Mexican Farmers Adoption of Hybrid Maize Seed - The Role of Social Psychology, Risk and Ambiguity Aversion," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277410, International Association of Agricultural Economists.
    14. James Andreoni & Charles Sprenger, 2010. "Risk Preferences Are Not Time Preferences: Discounted Expected Utility with a Disproportionate Preference for Certainty," NBER Working Papers 16348, National Bureau of Economic Research, Inc.
    15. Thomas Dohmen & Georgios Gerasimou, 2024. "Learning to Maximize Ordinal and Expected Utility, and the Indifference Hypothesis," Papers 2402.16538, arXiv.org, revised Apr 2025.
    16. Eide, Erling, 1998. "Optimal Provision of Public Goods with Rank Dependent Expected Utility," Public Finance = Finances publiques, , vol. 53(3-4), pages 296-311.
    17. Kaywana Raeburn & Sonia Laszlo & Jim Warnick, 2023. "Resolving ambiguity as a public good: experimental evidence from Guyana," Theory and Decision, Springer, vol. 95(1), pages 79-107, July.
    18. Christopher Schwand & Rudolf Vetschera & Lea Wakolbinger, 2010. "The influence of probabilities on the response mode bias in utility elicitation," Theory and Decision, Springer, vol. 69(3), pages 395-416, September.
    19. Chris Brooks & Louis Williams, 2024. "People are people: A comparative analysis of risk attitudes across Europe," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(3), pages 3545-3566, July.
    20. Schrieks, Teun & Botzen, W.J. Wouter & Haer, Toon & Aerts, Jeroen C.J.H., 2025. "Preferences for drought risk adaptation support in Kenya: Evidence from a discrete choice experiment and three decision-making theories," Ecological Economics, Elsevier, vol. 227(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:elcore:v:25:y:2025:i:3:d:10.1007_s10660-023-09755-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.