Determinants of e-Commerce Adoption by Small Firms in Portugal

The goal of this study is to identify the determinants of e-commerce adoption by small Portuguese firms. We considered a framework with a three stage adoption process, where the sequence begins with the use of internet and progresses through web site development to e-commerce. A logistic regression analysis is conducted in each stage, using a representative sample of 3,155 firms surveyed by the Portuguese Institute of Statistics. We used as dependent variable the internet adoption decision (0/1), the web site adoption decision (0/1) and the e-commerce adoption decision (0/1). As explanatory variables we considered technological, organizational, and environmental (TOE) factors such as technology readiness, technology integration, security applications, firm size, perceived benefits, IT training programmes, access to the IT system of firm, internet and e-mail norms, perceived obstacles, and competitive pressure. Our findings reveal that the influence pattern of TOE factors vary with the phase of the adoption. Furthermore, the impact of the technological and organizational factors decreases as the level of e-commerce involvement increases. On the contrary, the importance of the environmental factor (competitive pressure) is more pronounced at the last adoption phase. Such findings are consistent with most of the predictions advanced in earlier studies published on this subject and can be used to develop the adequate public policies to encourage small firms' involvement with e-commerce. Explanations and implications are offered.