The relationship between enterprise internationalization and E-business adoption: A perspective of Indonesian SMEs

Small and medium enterprises´ (SMEs) contribution to the economic growth of a country is widely acknowledged. The shift of consumer´s consumption habits from offline to online demands SMEs to adopt e-business. SMEs, on the other hand, despite all the benefits that e-business could offer, have been slow to adopt it. Adding to adoption pressure is the trade liberalization around the world that necessitates some use of e-business to trade internationally. Conducted in the context of an emerging economy, this preliminary study explores the relationship between international orientation of SMEs and e-business adoption. In addition, as implementation cost has been cited to be one of the top barriers of e-business adoption in emerging economies, this study investigates the relationship between financial support received by SMEs and their adoption. A sample of 90 SMEs in manufacturing sector was selected as the unit of our analysis. The resulting analysis reveals that SMEs with international orientation show tendency to adopt e-business whereas those that receive financial support, contrary to much of the existing literature, indicate no inclination to adopt. The result implies that internationalization of SMEs in the emerging economy may have more influence on their readiness to adopt e-business than financial assistance.