International Conference on Entrepreneurship and Business Management (ICEBM 2013)

Sanur, Bali November, 21-22, 2013

ISBN: 978-979-9234-49-0

THE EFFECTS OF MACRO ENVIRONMENTAL FACTORS ON INFORMATION

AND COMMUNICATION TECHNOLOGY USAGE BY SMES IN A
DEVELOPING COUNTRY
Md. Shah Azam1), Mohammed Quaddus2)
Graduate School of Business
Curtin University
78 Murray Street, Perth 6000, WA, Australia
e-mail:mdshah.azam@yahoo.com.au,mohammed.quaddus@gsb.curtin.edu.au

Abstract
This study looks at the effects of macro environmental factors on the adoption and usage of Information and
Communication Technology by SMEs in Bangladesh. A mixed method research approach (i.e. qualitative
field study followed by a quantitative survey) was employed to develop the research model and test
hypothesised relationships among the study constructs. Eight hypotheses are constructed to attain the
research objectives. A PLS based structural equation modeling was employed with a dataset of 557 SMEs
for the estimates. Data were collected through a questionnaire survey from different SMEs in Bangladesh
selected by applying a stratified random sampling technique. The structural model reveals a significant
association of perceived usefulness, technology infrastructure of the country, and government policy and
subsidy with SMEs intention to use ICT. The estimates also show a strong and significant effect of intention
on actual ICT usage behaviour. The study concludes with implications.
Keywords: Information and communication technology, intention and actual usage behaviour, technology
acceptance model, macro environmental factors
Introduction
The rapid usage growth of Information and Communication Technology (ICT) has reshaped the global
socio-economic and business environment, and made changes in the pattern of personal, social and business
communication in the past few years. The worlds shift towards the digital culture, from the traditional way
of communication and transaction creates enormous opportunities for the individuals and businesses.
Diversified use of ICT, particularly the Internet, affects everyone on the planet even those who do not
themselves have first-hand access to ICTs. All necessary services, such as food distribution, power networks,
water supplies or mass transportation are now controlled and managed by ICT networks and applications. In
the past few years, the developed countries have received huge benefits by diversified and innovative
applications of ICT as of their high ICT penetration and developed infrastructure. Following the achievement
of developed countries, the developing countries are also motivated to implement ICT into various functional
areas in view of ensuring ICTs potentials in the economic development. The philosophy of economic
development though ICT involve the SMEs in the ongoing research initiatives as it is one of the most
influential parts of any countrys development process.
Like developed countries, SMEs in developing countries are also contributing positively in the
development process. As a developing country, the prospects and contribution of Bangladeshs SMEs in its
economic development are enormous. SMEs account for about 45% of manufacturing value addition in
Bangladesh. They account for about 80% of industrial employment, about 90% of total industrial units and
about 25% of the total labour force. Its total contribution to export earnings varies between 75% and 80%.
The number of SMEs and its significant contribution to the national economy in terms of employment
generation, GDP contribution and export earnings thus create a significant research opportunity to look at the
adoption and diffusion of information and communication technology.
In the past, the adoption and diffusion phenomenon of ICT from an organizational perspective has been
looked into mostly by anticipating the effects of innovation characteristics and the impacts of organizational,
institutional and environmental forces (see Davis, 1989; Thong, 1999; Zhu et al., 2003; Venkatesh et al,
2003; Venkatesh& Zhang, 2010; Azam &Quaddus, 2012; Madden, Azam & Beard, 2013) . However, the
impacts of macro country level environmental factors have not been studied widely in addressing the ICT
adoption and diffusion. This study considers macro environmental factors as antecedents of ICT adoption and
diffusion among the SMEs in Bangladesh.

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Theoretical Framework&Hypothese Development
This research is, in general, an initiative of looking at the effects of different antecedents of ICT adoption
and diffusion among SMEs in Bangladesh. Theory of Reasoned Action (Fishbein and Ajzen, 1975), Rogers
innovation diffusion theory (Rogers, 1983), Theory of Planned Behaviour (Ajzen, 1985), and Technology
Acceptance Model (Davis, 1986) have been analysed for the study.
According to Rogers (1983), the decision process begins with knowledge of the existence of the
innovation and matures through persuasion, decision and implementation stage. During the knowledge stage,
a consumer is exposed to an innovations existence and gains some understanding on how it functions, the
persuasion stage refers to that period when a consumer forms either a favourable or an unfavourable attitude
towards the innovation. Often, early adopters who are typically innovators themselves, or in some cases, exist
as change agents, attempt to convince the general user population of the benefits of an innovation.
In the model of innovation diffusion, Rogers (1995) indicates that the persuasion stage is very important
to form a positive attitude (willingness or intention) to adopt the innovation (Rogers, 1995). Rogers identifies
all benefits and barriers as well as many other factors that affect this adoption as five attributes of innovation
that are the perceived characteristics of innovation as perceived by an individual or organisation. These
five attributes or characteristics of innovation consist of relative advantage, compatibility, complexity,
trialability and observabiltiy.
The Theory of Reasoned Action (Fishbein&Ajzen, 1975; Azjen&Fishbein, 1980) is a well-researched
theory for the study of behavioural intention by explaining causes of behavioural intent and illustrating the
structures of relations.
The Theory of Reasoned Action (TRA) has two unique factors, attitude toward the behaviour (ATT) and
subjective norm (SN) that contribute to behavioural intention (BI), which finally explains the actual
behaviour. The basic assumption underlying the theory of reasoned action is that humans are quite rational
and make use of all available information, both personal and social, before they act (Crawley III and Coe,
1990). This theory has been reviewed and modified to explain behaviour comprehensively, one such
modification, the Theory of Planned Behaviour (TPB) is a popular successive theory which explains the
individuals behaviour in a broader perspective than the TRA.
TPB was proposed by IcekAjzen (1985; 1991) which is an extension of theory of reasoned action (Ajzen
and Fishbein, 1980). TBP was developed to address the original models limitations in dealing with
behaviour over which people have incomplete volitional control (Ajzen, 1985; 1991). Thus it overcomes the
problematic predictive validity of the theory of reasoned action to explain the behaviour under study which is
not under full volitional control. Ajzen(1985) made the extension by including one additional construct,
namely perceived behavioural control, to predict behavioural intention and behaviour. Perceived behavioural
control refers to peoples perception of ease or difficulty of performing the behaviour of interest (Ajzen,
1991, p.183). A number of external factors (such as environmental, organisational etc.) can make a given
behaviour easier or harder to perform.
The theory of planned behaviour (TPB) holds that human action is guided by three kinds of consideration
which are: beliefs about the likely outcomes of the behaviour and the evaluations of these outcomes
(behavioural beliefs), beliefs about the normative expectations of others and motivation to comply with these
expectations (normative beliefs), and beliefs about the presence of factors that may facilitate or hinder
performance of the behaviour and the perceived power of these factors (control beliefs). TPB also explains
that certain factors or constructs known as control beliefs, may facilitate and impede peoples behaviour,
thus, can influence a persons adoption intention or action (e.g., purchasing a product or service) (Ajzen and
Madden, 1986).
The technology acceptance model (TAM) was developed by Davis (1986) to explain information
technology (IT) usage behaviour. It is an adaptation of TRA and states that behavioural intention to use a
technology is directly determined by two key beliefs: Perceived usefulness and perceived ease of use.
Perceived usefulness assesses the extrinsic characteristics of IT (i.e. task oriented outcomes)while perceived
ease of use examines intrinsic characteristics of IT(e.g., ease of use, ease of learning, flexibility and clarity
of interface)(Davis, Bagozzi, and Warsha, 1989). .
The earlier version of TAM included subjective norms along with perceived ease of use and perceived
usefulness as antecedents of behavioral intention, and it was omitted from the model latter. Social influence
has a strong effect in technology adoption in mandatory setting while it has different effects in voluntary
setting and in the context of having experience (Venkatesh& Morris, 2000). One key benefit of using TAM
to understand system usage behaviour is that it provides a framework to examine the influence of external
factors on system usage (Hong et al. 1999).
Various external variables such as computer self-efficacy, social influence, experience, voluntariness,
diversity of technology, trust, culture, and relevance, have been added in the context of TAM in different
settings to get more insight into technology acceptance in previous initiatives (Agarwal& Prasad, 1999,
Davis, Bagozzi&Warshaw, 1989; Shih, 2004; Yoon, 2008; Taylor & Todd, 1995; Venkatesh& Morris, 2000;
Hong et al., 1999; Venkatesh& Davis, 1996; Venkatesh& Davis, 2000; Wang, Wang & Tang, 2003).

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Molla and Lircker (2005), and Marques et al. (2011) indicate that overall country infrastructure is an
important predictor of information technology adoption. Several country-related factors have been considered
in many previous studies, such as government e-readiness (Molla&Lircker, 2005), and regulatory
environment (Zhu & Kraemer, 2005; Zhu et al., 2006), to look at its impact on the adoption and usage of
ICT. Most of those studies consider a little part of country level infrastructures. However, in view of
developing a comprehensive framework to study the effects of macro environmental factors this study
administered a qualitative filed study. The analysis of the field interviews explored five country level
environmental factors, such as technology infrastructure, human infrastructure, financial infrastructure, legal
infrastructure, and government policy and subsidy, which may have influence on SMEs adoption and use of
information and communication technology1.
The field study analysis also provided a comprehensive picture of the predicted constructs and their
relationship with the adoption of the technology. Five country level factors are determined as (Field study):
Technology infrastructure: Technology infrastructure consists of availability and coverage of Internet
service in the country, speed and sophistication of Internet, availability of necessary hardware and
accessories, and availability and frequency of power supply.
Human infrastructure: Human infrastructureis comprised of the level of ICT knowledge of the general
people, their computing skill, and availability of affordable institutional support for ICT education.
Financial infrastructure: Financial infrastructure is comprised of the online banking services, and trends
of debit and credit card usage.
Legal infrastructure: legal infrastructure is comprised of legal supports for digital communication and
business through Internet, as well as online consumer protection.
Government policy and subsidy: Government policy and subsidy construct comprises Governments
commitment towards developing a ICT based society according to countrys ICT policy, Government Tax
and customs policy, Government grants , and subsidy to promote ICT use.
Hypotheses Development:
Based on the above discussions the following hypotheses have been proposed (see Figure-1 given in
Appendix-1):
H1a: Perceived usefulness has direct positive influence on SMEs intention to use ICT.
H1b: Perceived ease of use has direct positive influence on SMEs intention to use ICT.
H1c: Technology infrastructure has direct negative influence on SMEs intention to use ICT.
H1d: Human infrastructure has direct negative influence on SMEs intention to use ICT.
H1e: Financial infrastructure has direct negative influence on SMEs intention to use ICT.
H1f: Legal infrastructure has direct negative influence on SMEs intention to use ICT.
H1g: Government policy and subsidy has direct positive influence on SMEs intention.
H2: Intention has direct positive influence on SMEs ICT use.
Research Methodology and Findings
This study applies a mixed method research approach. An in-depth field study was conducted to explore
constructs and anticipate the structural links among them as well as fine-tune and contextualise the concepts
developed from the literature. To test the model developed from the field study a questionnaire was designed
for data collection. The measures of the questionnaire used to operationalise the constructs were adapted
from relevant prior studies, taking into consideration of the findings of the field study and the targeted
context. The developed questionnaire was further validated via pilot test. The final questionnaire was sent to
owners or managers (decision maker) of SMEs or their delegated representatives in Bangladesh. With the
assistance of a group of trained surveyors 557 survey responses were received. The collected survey data was
analysed through PLS graph software. This paper reports the results of the questionnaire survey.
Sample Selection
The study investigates the opinions and perceptions of the owner or owner manager or manager (decision
maker) or delegated representatives of SMEs located at or adjacent to Dhaka city. Dhaka has been selected as
the sampling area considering the fact that high industry concentration is evident at or nearby Dhaka. The
Internet penetration is also high at Dhaka which comprises around 80% of total countrys Internet users.
Demographic Information
Table-1 (see Appendix-1) presents the profile of survey respondents. 50.4% of the respondents are from
manufacturing industry and 49.6% from service industry. 40.4% firms surveyed are from readymadegarments

Due to space limitation, statements and quotations of the field study are not stated in detail.

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industry, 10.2% from leather industry, 39.0% respondents from ICT and telecommunication industry and 10.4%
from tourism industry.
Each of the respondents is using some sort of ICT. This survey confirms that the firm surveyed have
Internet and ICT usage experience, 100% firms reported that they have online banking and some experience
of online communication with main suppliers. 98.0% of the firms surveyed have homepage, 65.7% have
product cataloguing capable homepage, 58.3% firms participates in electronic commerce while 29.1% have
enterprise resource systems. 91.7% firms have cable broadband connectivity. 26.9% firms have a countable
experience. They started ICT operations prior to 2000 while 73.1% started ICT operation after 2000. 72.0%
of the firms surveyed are small and 28.0% medium.
Hypotheses Testing
Model Specification
In the theoretical model, actual usage behaviour (B) has been modelled as a direct function of behavioural
intention (BI). BI is in turn, a weighted function of perceived usefulness (U), perceived ease of use (E),
technology infrastructure (T), human infrastructure (H), legal infrastructure (L), financial infrastructure (F),
government policy and subsidy (G) and error term (e).
B= w1BI+e (1)
BI=w2U + w3E + w4T+w5H+ w6L+w7F+w8G +e (2)
Data Analysis and results
The structural equation modelling is appropriate to analyse the data in accordance with the proposed
conceptual framework. A growing number of researchers are adopting causal or structural equation
modelling as it allows the analysis of complex networks of constructs, each construct typically measured by
multiple variables. Understanding the nature of the study and its practical implications, the data gathered
from the survey were analysed by partial least squares (PLS) based structural equation modelling (Barclay,
Higgins and Thompson 1995).
Measurement model
The measurement model was first assessed by a confirmatory factor analysis though PLS graph. The
model, therefore, was assessed for evaluating the psychometric properties of the measurement model in terms
of reliability, convergent validity, and discriminant validity (Fornell& Larker, 1981). The reliability of the
constructs was assessed by considering composite reliability. Construct reliability for all of the factors in the
measurement model were above 0.70, an acceptable threshold suggested by Nunnaly and Bernstein (1994)
and Straub (1989) respectively.
Construct validity was evaluated by examining the factor loadings within the constructs as well as the
correlation between the constructs (Andrson&Gerbing, 1988). Importantly, the model is comprised of both
reflective and formative constructs. While factor loadings and correlation between the constructs are
considered for the construct validity of the reflective constructs, the factor weights and multicollenearity
among the formative items are considered for the validity of the formative constructs. According to Bollen
and Lennox (1991) all formative items are retained to address the latent constructs irrespective of significant
or non-significant value to avoid the question of possibility of violating content validity (Fornell, Lorange,
&Roos, 1990; Santosa, Wei, & Chan, 2005; Diamantopoulos &Winklhofer, 2001). In addition to the
indicators weight, the test of multicollinearity was conducted on the formative items. Unlike reflective
indicators, where multicollinearity between construct items is desirable (illustrated by high Cronbachs alpha
or composite reliability scores), excessive multicollinearity in formative constructs can destabilise the model.
The existence of very high correlations among the measures may be suggestive of the case that multiple
indicators are tapping into the same aspect of the construct. Thus, low collinearity among items is vital in
ensuring the stability of the estimates (Mathieson et al., 2001).
The factor loadings on all of the reflective constructs were highly satisfactory in the expected direction
with satisfactory critical ratio and level of significance (i.e. ranged between .7446 to .9668), thus providing
evidence of satisfactory item convergence on the intended constructs (see Table 2 at Appendix-2). Table 2
also shows the factor weights, tolerance and VIF value for the indexed formative items indicating absence of
multicollinearity between the formative items.2
This study used the square root of the AVE and cross loading matrix to assess the discriminant validity as
suggested by Igbaria, Guimaraes, and Davis (1995) and Barclay, Higgins and Thompson (1995). According
to Barclay et al., (1995), the model is assessed to have acceptable discriminant validity if the square-root of
the AVE of a construct is larger than its correlation with other constructs. The results are detailed in Table 3
(see Appendix-3) with the square roots of the AVEs shown in the main diagonal of the table. The off
2

VIF value <10

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diagonal elements represent the correlations among the latent variables. Table 4 (see Appendix-3) indicates
that the discriminant validity of the latent variables was met, which means that all the latent variables are
different from each other3.
Discriminant validity of the measures has also been cross-checked through cross loading matrix (Barclay
et al., 1995). Results of the cross-loading analysis showed that all items loaded higher on the construct that
they were measuring than they did on other constructs in the model (Barclay et al., 1995). To save space, the
cross-loading matrix is not presented in this paper.
Structural model
The structural model deals with testing the hypothesized relationships. Bootstrap method has been used to
test the hypotheses. Table 4 (see Appendix-3) shows a summary of the results detailing the path coefficients
and t-statistics.
It is observed that among the primary hypotheses H1a, H1c, H1g and H2 were supported (significant t-values),
while hypotheses H1b, H1d, H1e, and H1f were not supported (insignificant t-values). According to Santosa,
Wei, and Chan (2005) the nomological validity or explanatory power of the proposed model can be assessed
by observing the R2 values of the endogenous constructs. The model explains 58.6% of the variance (R2) in
intention to use ICT and 81.7% of the variance (R2) in SMEs actual ICT usage behaviour. All R2 values
exceeded the minimum required value of 0.10 as suggested by Falk and Miller (1992) (see Table 4).
The structural equation estimation shows that all constructs under the model are related in expected
direction according to the proposed theoretical framework.
The study has shown that the proposed model can be used to explain intention to use as well as actual use of
Information and Communication Technology by SMEs in the context of Bangladesh.
The fundamental component of TAM, perceived usefulness was found to have strong significant effects on
behavioural intention. The result is partially complementary to some of the previous studies (such as Szajna,
1996; Subramanian, 1994; Chau& Hu, 2002; Chau, 1996) as the study was not found to have strong
significant effects on behavioural intention. The result is also not fully complementary to the fundamental
assumptions of TAM as supported by many previous studies (Davis, 1989; Davis et al., 1989, Lu et al., 2003;
Mathieson 1991; Taylor & Todd, 1995a; Venkatesh& Davis, 2000; Szajna, 1996; Yoon, 2008).
As postulated the various country infrastructure and government policy related constructs have also
significant influence in explaining SMEs intention to use ICT and actual use behaviour. Among the five
predicted macro environmental factors, technology infrastructure, and government policy and subsidy were
found to have significant influence on intention, while human infrastructure, financial infrastructure, and
legal infrastructure didnt produce any significant influence on intention to use ICT among the SMEs in
Bangladesh.
Finally the results of this study confirm intention as a significant determinant of actual ICT use behaviour of
SMEs in Bangladesh. This finding supports previous theories and empirical studies (Ajzen&Fishbein, 1980;
Azam &Quaddus, 2013; Chang, 1998; Fishbein&Ajzen, 1975; Mathieson, 1991; Taylor & Todd, 1995a;
Taylor & Todd,1995b; Venkatesh& Morris, 2000; Venkatesh& Davis, 2000).
Discussions
The structural equation model explains the joint effects of all constructs used in the model. The study
depicts the magnitude and degree of the effects of the antecedent factors of ICT use among SMEs in
Bangladesh. The study found that perceived usefulness, technology infrastructure and government policy and
subsidy have significant influence on behavioural intention while perceived ease of use, human
infrastructure, financial infrastructure, and legal infrastructure didnt produce significant effects. Thus
hypotheses H1a, H1c and H1g were supported and H1b, H1d, H1e, and H1f were not supported.
The technology infrastructure of the country is poor. The teledensity of the country is not satisfactory.
Although the price for internet service is cheaper in comparison to many developed and developing countries,
the speed of Internet, in general, is very slow and its coverage is limited. The mobile operators are currently
providing internet services, thus the scenario has become changed. Although the speed is very slow mobile
operators are able to provide Internet services to the remote places through wireless technology. The power
supply of the country is not adequate. Power shortage is one of the main problems that the country has been
3

Table 3,shows construct correlations and square root of average variance extracted of all reflective and
formative constructs. For discriminant validity, square root of AVE value of a construct should be greater
than its relationship with other constructs. While all of the constructs satisfy this rule, the correlation
between technology infrastructure and financial infrastructure are very close. It is not problematic as these
two constructs are formative. The validity of the formative constructs is examined through factor weights and
multicollenearity among the index items. Table 2 shows that all formative constructs are valid for further
analysis.

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facing several years with many political and economic crises. To manage public demand with a limited
resources the power supply authority are not able to provide full service to the industry and people. Thus
power failure has become as a part of everyday life and corporate culture. Due to frequent power failures,
work in an automated environment has become in-realistic which may also cause productivity and efficiency
loss in the work. As a result, the hypothesised significant (negative) influence of technology infrastructure
on ICT adoption or use among SMEs in Bangladesh is supported by the results of this study.
The human infrastructure of the country is not satisfactory. That is rate of literacy of the country is not
satisfactory. The general level people are neither quite aware about computing nor motivated to initiate
essential functions particularly professional functions through computer. Thus the human infrastructure was
anticipated as negatively related with intention to adopt ICT.
The firms surveyed are mostly engaged in International operations and a countable number of the
respondents are from telecommunication and ICT industry. The adopting firms didnt suffer with the
shortage of human capital. They have adequate number of educated and skilled people, as most of the firms
have international collaborators. They have also skilled resources and competent employees. The operation
and maintenance of ICT are primarily dependent on the capable and skilled people. Thus although human
infrastructure was anticipated to be negatively related to ICT adoption was not significant.
Financial infrastructure of the country, i,e trend of debit card and credit card usage, and online banking
facility, is not satisfactory. As the firms are international they didnt find any problem with the lower level of
use of online banking and ATM transaction.
Legal infrastructure of the country is also poor. The country although have a ICT policy and many laws,
none of them are capable of protecting any online disputes. Many of the firms are collaborating with foreign
firm who have adequate participation in online. Their inspirations and requirements motivate the firms to
adopt ICT into their various functional areas. The legal infrastructure although was hypothesized as
negatively related to the adoption and use of ICT, was not found to have a significant relationship with
intention to adopt ICT.
The government of the Peoples Republic of Bangladesh provided a sincere attention to promote ICT use
into different individual, social and business functions. The government had withdrawn all taxes from
computer hardware and provided tax holiday supports for the software houses. The government also
launched various motivational programmes including financial supports such as loan, grants and subsidies,
and policy supports, to promote ICT use and software development in the country.
The country also initiated ICT based government-citizen and government-business interactions by
gradually establishing e-government services in different govern departments. Government policy and
subsidy thus was found to have positively related to the intention of ICT use among the SMEs in Bangladesh.
Finally behavioural intention was found to have a strong and significant effect of on actual use behaviour.
This result suggests that strong and positive behavioural intention may play a pivotal role to foster SMEs ICT
usage behaviour in Bangladesh.
Conclusions
Small and medium enterprises can play significant role in the national development. The economic
development of the country is largely dependent on the development of SMEs as the SMEs of today will be
the multinationals in tomorrow. Adoption and use of ICT can help develop SMEs by improving efficiency in
their operations and by being more competitive in the global environment.
The government of Bangladesh is committed to establishing a computer driven society and utilising the
potentials of information and communication technology in the countrys economic development. To ensure
the ICTs positive contribution in the economic development the present government sets up the countrys
ICT goal as to establish the Digital Bangladesh, an ICT based government and business environment, by
2021. The government has also introduced some financial (such as various grants and subsidies) and
infrastructural supports. This study deals with a different aspect of ICT adoption where government can play
an important role to improve the SMEs ICT usage behaviour. It is believed that governments positive
initiatives to develop the macro environmental issues particularly improve the countrys technological
infrastructure, and government policy and subsidy will result in increased use of ICT in SMEs in Bangladesh.
The existing ICT policy and governments commitment towards establishing the digital Bangladesh is the
basis for countrys ICT revolution. However, establishing a strong technology infrastructure is necessary.
Availability of a high speed Internet service and essential computer hardware and accessories at reasonable
price, and un-interrupted power supply are vital. Government policy and support services such as ICT policy,
customs and Tax policies, grants, subsidies and various motivational programmes should be proactive to
ensure the rapid expansion of ICT adoption and use by SMEs in Bangladesh.

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Authors Bibliography
Md Shah Azam
Md Shah Azam is Associate Professor at the University of Rajshahi, Bangladesh. He holds a Master of
Business Studies (MBS) in marketing and a Master of Philosophy (MPhil) degree in the field of diffusion of
electronic commerce. His research interests include adoption and diffusion of innovation, receptivity of
information and communication technology by individuals and organisations, the effects of culture and
environment on technology usage, decision processes and productivity of technology usage. Currently he is
enrolled at Curtin University, Western Australia for higher studies. He is also currently involved in two
research projects at the Communication Economics and Electronic Markets Research Centre (CEEM). He has
published in many scientific journals and collective works and has presented his work at many international
conferences.
Mohammed Quaddus
Dr Mohammed Quaddus received Ph.D. from the University of Pittsburgh, M.S. from University of
Pittsburgh and Asian Institute of Technology. His research interests are in Information & Decision Systems,
Logistics and Supply Chain Management, Risk and resiliency in supply chain, RFID in supply chain, and
related areas. DrQuaddus has published over 200 papers in refereed journals, international conferences and
chapters in Books. His publications have appeared in European Journal of Information Systems, Decision
Support Systems, Supply Chain Management An International Journal, Rural Sociology, among many
others. He has successfully supervised over 40 doctoral students. In 1996 and 2005 he received researcher of
the year award in Curtin Business School, Curtin University of Technology, Australia. Currently he is a
Professor of Information & Decision Systems with Curtin Graduate School of Business. From Jan 2009
Dec 2011 he was deputy dean and dean of research, Curtin Business School, Curtin University of
Technology, Australia.

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ISBN: 978-979-9234-49-0
Appendix-1
PU
PEU

H1a
H1b

TEC
H1c

HUM

H1d

INT

H2

USE

H1e

FIN

H1f

LEG H1g
GOV
Note: PU=perceived usefulness, PEU=perceived ease of use, TEC=technology infrastructure, HUM=human
infrastructure, FIN=financial infrastructure, LEG=legal infrastructure, GOV=government policy and subsidy
Figure1: Final Research Model

Table 1: Demographic profile

Description

Frequency

Industry

Manufacturing
Service

282
275

50.6%
49.4%

Sector

Readymade Garments
Lather
ICT and telecommunications
Tourism

225
57
217
58

40.4%
10.2%
39.0%
10.4%

Business Size

Small
Medium

401
156

72.0%
28.0%

ICT Status

Homepage
Online cataloguing
Participate in online commerce
ERP

546
366
325
162

98.0%
65.7%
58.3%
29.1%

Nature of customer

Geographically diverse customer

Customers not geographically diverse

509
48

91.4%
8.6%

Internet connectivity

Dial-up/DSL
Broadband(cable and mobile)
Mobile broadband

29
511
293

5.2%
91.7%
52.7%

ICT Experience

Started ICT before 2000

Started ICT since 2000

150
407

26.93%
73.07%

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International Conference on Entrepreneurship and Business Management (ICEBM 2013)

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ISBN: 978-979-9234-49-0
Appendix-2
Table 2: Measurement Model-I
Constructs

Items

Loadings/
Weights

Std. error/
tolerance

t-value /
VIF

CR

AVE

Reflective Constructs
Perceived Usefulness

PU1

0.9541**

0.0051

185.28

(Reflective)

PU2

0.962**

0.0049

196.41

PU3

0.9534**

0.0074

128.94

PU4

0.9177**

0.0093

98.33

Perceived Ease of Use

PEU1

0.9575**

0.0049

197.26

(Reflective)

PEU2

0.9668**

0.0032

298.37

PEU3

0.9621**

0.0045

213.22

PEU4

0.9041**

0.0129

70.09

Intention

INT1

0.8498**

0.0112

75.75

(Reflective)

INT2

0.8872**

0.012

74.03

INT3

0.9137**

0.0058

156.11

INT4

0.8705**

0.0106

81.86

INT5

0.857**

0.011

77.84

Use

USE1

0.8386**

0.0118

71.13

(Reflective)

USE2

0.8729**

0.01

87.58

USE3

0.8764**

0.0094

92.68

USE4

0.7446**

0.0148

50.19

USE5

0.7594**

0.0152

50.10

TEC

TINFRA1

0.2185

.402

2.489

(Formative)

TINFRA2

0.7877

.419

2.386

TINFRA3

-0.2381

.946

1.057

TINFRA4

-0.499

.649

1.542

HUM

HINFRA1

-0.2461

.310

3.225

(Formative)

HINFRA2

0.8543

.339

2.953

HINFRA3

-0.0983

.523

1.912

LEG

LINFRA1

0.7303

.880

1.136

(Formative)

LINFRA2

-0.0405

.880

1.136

FIN

FINFRA1

1.0229

.683

1.465

(Formative)

FINFRA2

-0.1995

.683

1.465

GOV

GOV1

0.2312

.894

1.119

(Formative)

GOV2

1.0881

.421

2.376

GOV3

-0.1794

.236

4.232

GOV4

-0.4896

.245

4.087

0.971

0.895

0.972

0.898

0.943

0.767

0.911

0.673

0.876

0.573

0.666

0.676

0.592

0.510

0.717

0.591

0.665

0.410

Formative constructs

Note: Table values indicate loadings, standard error and t-valuefor the reflective constructs and weights, tolerance
and VIF value for formative constructs, AVE=Average variance extracted, **=Significant at .001

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ISBN: 978-979-9234-49-0
Appendix-3

Table 3: Measurement Model-II

PU

PEU

TEC

HUM

LEG

FIN

GOV

INT

PU

0.895

PEU

0.644

0.9476

TEC

-0.067

0.027

0.7570

HUM

-0.057

0.09

.727

0.896

LEG

-0.085

0.04

.096

.189

0.7141

FIN

-0.081

0.067

.764

.754

.208

0.7688

GOV

0.164

0.119

.110

.122

.096

0.6403

INT

0.769

0.519

-.087

-0.053

-0.024

-0.079

.180

0.8758

USE

0.71

0.546

-0.012

0.043

0.011

0.006

.187

.723

USE

0.8203

Note: CR = Composite reliability, PU=perceived usefulness, PEU=perceived ease of use, TEC=technology

infrastructure, HUM=human infrastructure, FIN=financial infrastructure, LEG=legal infrastructure,
GOV=government policy and subsidy, INT=behavioural intention, USE=use of ICT

Table 4: Structural Model

Weight

SE

t-statistic

Comments

PU INT

0.723

0.0379

19.06**

Supported

PEU INT

0.037

0.0384

0.96

Not Supported

TEC INT

0.102

0.0373

2.73**

Supported

HUM INT

0.019

0.0315

0.60

Not Supported

FIN INT

0.027

0.0393

0.69

Not Supported

LEG INT

0.045

0.0295

1.52

Not Supported

GOVINT

0.068

0.0256

2.66**

Supported

INT USE

0.925

0.0049

189.39**

Supported

** indicates p< .01, * indicates p< .05 Note: R2 for INT = 0.594, R2 for USE = 0.851
Note: PU=perceived usefulness, PEU=perceived ease of use, TEC=technology infrastructure, HUM=human
infrastructure, FIN=financial infrastructure, LEG=legal infrastructure, GOV=government policy and subsidy,
INT=behavioural intention, USE=use of ICT

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