Research On Factors Influencing Social Media Adoption By Small And Medium-sized Enterprises In Developing Countries And Their Impacts On Performances

Since the 2008 – 2009 global crisis,the governments have given significant importance to Small and medium-sized enterprises(SMEs)as they play a key role in countries' economic development irrespective of developed or developing.In addition,SMEs are contributing meaningfully to socio-economic objectives such as job creation,lower the unemployment rate,industrial and entrepreneurial development,poverty reduction,increased competition,and export promotion.Globally,representing over 90 percent of businesses and generate over 50 percent of the jobs.In fact,their contribution is much higher in emerging countries like Pakistan,where they contribute over 40 percent to GDP and generate over 70 percent of jobs.Despite the significant contribution,SMEs face several challenges: inadequate capabilities and limited resources(human,physical and financial).In addition,due to the increasing globalization and trade liberalization,businesses worldwide face issues concerning pressure to improve productivity and customer services,which requires the adoption of technology.As a result,SMEs must adopt innovative technology such as social media(SM)to support their business activities and enhance firm performance.However,several SMEs are operating in developing countries are constantly facing challenges,and their technology adoption rate is very slow.Therefore,this study aims to identify the factors influencing SM adoption and SMEs performance in developing countries,especially in Pakistan.This research used a grounded theory approach to drive factors influencing SM adoption.In the qualitative approach,data were collected using semi-structured interviews from SMEs owners and managers.For the analysis of qualitative data,the researcher used a hybrid thematic analysis approach.Aside from the qualitative approach,the quantitative approach has also been employed to test the proposed model based on grounded theory and generalize the research results.A closedended questionnaire based on a 5-point Likert scale was administered and distributed through an online survey to collect data from SME representatives(i.e.,owners and managers).After six months of data collection,a sample of 519 valid responses has been collected.The quantitative data analysis was run through partial least square structural equation modeling(PLS-SEM),and both the statistical package for social sciences(SPSS)v25 and Smart PLS 3.0 v3.2.8 were used.To ensure the appropriateness of the techniques and the scales adopted to test the proposed relationships,preliminary tests were conducted using a pilot study.The findings provide a holistic view of SM adoption by SMEs operating in developing countries,especially Pakistan.Ten interconnected and overlapping underpinnings of technological,organizational,and environmental(TOE)context were constructed through a constructivist grounded theory using a hybrid thematic analysis process.These underpinnings are relative advantage,cost-effectiveness,compatibility,interactivity,visibility,top management support,entrepreneurial orientation,competitive intensity,competitive pressure,and customer pressure.These underpinnings were found to have a significant influence on SMEs' decision to adopt SM.The context of TOE was found to have a significant direct influence on SME performance and SM adoption;after the inclusion of SM adoption as a mediator into the proposed model,the technological context and environmental context were found to have an insignificant direct influence on SMEs' performance.Furthermore,the SM adoption itself was also found to have a significant influence on SME performance in Pakistani SMEs.Aside from the direct influence,the study found a significant mediating role of SM adoption between TOE context and SME performance.SM adoption partially mediates the relationship between organizational context and SME performance while fully mediates the link between technological context and SME performance and between and environmental context and SME performance.Furthermore,a significant moderating role of innovation capabilities(IC)on the relationship between SM adoption and SME performance has also been evidenced.This study findings have several contributions to existing theories and literature.First and most important,since most of the earlier studies focused on large organizations and SMEs operating in developed countries,this study provided an integrated framework(derived using grounded theory and for generalizability tested on large sample size)and provides aid to the existing literature of SM adoption in SMEs context operating in developing countries.Second,this study empirically tested not only the direct relationships between the construct but also used SM adoption as mediating variable to assist our comprehension of the interventions that influence SME performance operating in Pakistan,and in details,no study before evidenced the mediating role of SM adoption in SMEs setting operating in emerging countries.Third,this study empirically evidenced the moderating role of IC,which has rarely been tested in SMEs setting in developing countries and support the existing literature and calls of the study regarding the casual mechanism in the SMEs.Lastly,due to limited studies conducted in Pakistan and of slow adoption rate,this study employed a ground theory approach to improving understanding as well as used quantitative method to increase the generalizability of results in other developing countries;to summarize,this study used a mixed-method approach.Related to the managerial perspective,the present study promotes social media adoption by SMEs in developing countries and provides guidance for governments in formulating strategies regarding training and skills.