Determinants of SME performance: Evidence from Indonesia

  • Received October 11, 2022;
    Accepted March 23, 2023;
    Published March 31, 2023
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/ppm.21(1).2023.40
  • Article Info
    Volume 21 2023, Issue #1, pp. 471-481
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This work is licensed under a Creative Commons Attribution 4.0 International License

The rapid development of information technology encourages small and medium enterprises (SMEs) to accelerate digital transformation to increase their sustainable competitiveness. However, improved entrepreneurial skills must also support technology readiness to adopt e-commerce. This study aims to analyze the influence of entrepreneurial skills and e-commerce, which mediate the factors of technology readiness, top management support, and competitive pressure, on SME performance. The partial least squares structural equation modeling (PLS-SEM) was applied to estimate the research model on data from 520 respondents who actively use e-commerce in their business activities in Jakarta, Indonesia. Data were obtained by distributing questionnaires directly to SME. The results showed that entrepreneurial skills and e-commerce adoption positively affect SME performance. Furthermore, technology readiness, top management support, and competitive pressure positively affect e-commerce adoption and have implications for improving SME performance. Finally, this paper provides recommendations for SME managers and practitioners to improve business performance: e.g., they should enhance their entrepreneurial skills and increase e-commerce adoption for operational efficiency.

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    • Table 1. Descriptive analysis
    • Table 2. Quality criteria
    • Table 3. Statistical path analysis
    • Conceptualization
      Sri Harini, Diah Pranitasari
    • Formal Analysis
      Sri Harini, Endri Endri
    • Investigation
      Sri Harini, Endri Endri
    • Methodology
      Sri Harini, Diah Pranitasari, Endri Endri
    • Resources
      Sri Harini, Meldasari Said
    • Validation
      Sri Harini, Diah Pranitasari, Endri Endri
    • Visualization
      Sri Harini, Diah Pranitasari
    • Writing – original draft
      Sri Harini, Diah Pranitasari
    • Data curation
      Diah Pranitasari, Meldasari Said
    • Funding acquisition
      Diah Pranitasari, Meldasari Said
    • Project administration
      Diah Pranitasari
    • Software
      Diah Pranitasari, Meldasari Said
    • Supervision
      Meldasari Said, Endri Endri
    • Writing – review & editing
      Meldasari Said, Endri Endri