It is no secret that small and medium-sized enterprises (SMEs) represent the main drivers of a nation’s economy. SMEs provide job opportunities and contribute significantly towards a nation’s gross domestic product (GDP) [1
]. In Malaysia, SMEs represent more than 99% of total business establishments involving in sectors of manufacturing, services, agriculture, mining, and construction. Out of those sectors, almost 80% are micro-sized SMEs of which a majority are focused in service sector activities [3
]. As the nation’s main economic drivers, SMEs inevitably attract the government’s attention concerning their growth and issues of sustainability [4
]. As part of its continuous effort to promote new business establishments, the Malaysian government actively encourages the public to choose entrepreneurship as their first career choice. Various programs have been organized by the government to inculcate entrepreneurial culture among the public and cultivate their interest in entrepreneurship. Besides, enhancing entrepreneurship activities also comprised one of the government’s robust strategies to develop rural areas [5
The government actively strives to provide a conducive business environment to support new start-up business ventures and the growth of existing businesses. The government’s display of support and commitment is succinctly manifested in the “Rural Development Policy” in which entrepreneurship represents the main thrust. This bold action taken by the government is timely as previous studies have posited that rural communities’ active involvement in entrepreneurial activities can ultimately have a positive impact on the growth of local economies [6
]. The rapid growth of entrepreneurship activities can also have positive chain effects on other economic activities such as job creation, private investment flow, and the rural migration rate [7
]. To further strengthen existing entrepreneurship activities, the government has taken a proactive action of enhancing business support programs, so that a conducive business environment can be created for rural folks to form new businesses. In addition, the support programs are also meant to boost the sustainability of existing businesses [8
]. Furthermore, the government’s financial support programs such as soft loans and grants are made available to small businesses as a means to finance their capital expenditures and daily working capitals, at the same time encouraging the building of physical infrastructures to support the establishment of convenient business activities [8
In spite of all these, current changes in the global entrepreneurial ecosystem as a result of rapid technological changes have had a greater impact on the larger SMEs’ activities, affecting rural micro-enterprises the most [9
]. Moreover, a combination of financial constraints and low skills further exacerbate the impacts of rapid technological changes for micro-SMEs as the fierce competition is now fueled by a new digital business environment in which technology plays an increasingly important role in every single business activity [11
]. Nonetheless, SMEs of all sizes need to ride the new technological wave in order to remain relevant in the market. Explaining the importance of the role of technology to SMEs, the results of a study conducted by [11
] on four countries, namely Poland, the USA, Turkey, and China, found that social media was the main medium of communication between customers and companies, SMEs in this context. Never before has the role of technology in business proven to be so compelling than in the recent context when most retail economic activities were ‘taken over’ by technology, in particular, during the COVID-19 pandemic where human movements were severely restricted [12
]. This dramatic change in business environment was particularly noticeable when most retail business transactions were done online as consumers were no longer free to move to shop. It was generally found that SMEs using e-commerce to sell their products and services were most likely to survive the first wave of the COVID-19 pandemic′s lockdown measures [13
]. Meanwhile, SMEs, especially micro-enterprises that did not use e-commerce platforms for their typical business activities, were found to be severely affected by the lockdowns, with a tremendous decline in their revenues.
Therefore, to mitigate the burgeoning crisis, the government has been actively encouraging new and existing SMEs to adopt e-commerce as an essential element of their business model in order for them to stay relevant amid a highly competitive market. The rapidly shifting trends and developments only serve to support the timeliness of the formation of the National Entrepreneurship Policy 2030 (NEP 2030) in 2019 [5
]. The NEP 2030 provides relevant guidelines to entrepreneurs in navigating their activities as well as acting as a catalyst for growth among Malaysian SMEs. One of the objectives of NEP 2030 is to promote the usage of technology and digitization among SMEs, especially among micro-SMEs. In order to realize this objective, various agencies were made responsible to train micro-entrepreneurs in digitalization application skills, such as e-market platforms and social media, so that they can be effectively integrated in their daily business activities. Indeed, the government’s move to provide support assistance in the form of trainings and provision of a digital entrepreneur digitalization platform have been very timely. On top of that, in line with the latest technological developments and the fourth industrial revolution (Industry 4.0), the government is also currently developing and coordinating various online hubs for rural businesses to ensure that they retain their competitiveness [8
]. The initiative also aims to expand the rural business market through online platforms, synonymously and widely known as e-commerce. In other words, the government is actively promoting the transformation of rural business transactions and activities from the conventional brick-and-mortar system into a more convenient platform of e-commerce. Naturally, these rapid changes in an entrepreneurial ecosystem demand entrepreneur to maximize their technology usage and digitalize their business activities [14
]. This vitally important business transformation effort is also aligned with the aim of the NEP 2030, which is to establish digital entrepreneurship that is in line with the current business climate. Entrepreneurial digitization has the potential to strengthen marketing activities and also build domestic and global market chains. In addition, past studies have shown that online businesses are popular among many entrepreneurs due to their low operational costs, which means that they are especially suitable for small-sized businesses with limited financial resources [15
]. This explains why e-commerce today has become a popular and effective platform for conducting one’s business activities as well as acting as a substitute for conventional business practices [16
Recognizing the importance of the use of technology, especially e-commerce in business, this study aims to investigate the factors that influence the intentions and tendencies of rural small entrepreneurs to use e-commerce in their daily activities. This study is based on TAM and the traits theory, where TAM basically advocates that the intention to use technology is obtained by PerEU and PUF, while the traits theory states that entrepreneurial behavior also plays a role in decision making. Thus, this study suggests that traits factors are able to influence the PerEU and PUF of entrepreneurs towards e-commerce. These two theories are discussed further in Section 2
3. Materials and Methods
This study used quantitative methods to study a population that consisted of rural micro-entrepreneurs located in four localities in Kelantan. Furthermore, this study also applied cross-sectional data to measure the relationship of psychological traits, N of Ach and RTP, and PercEU, PUF, and intention. This study exploited the measurement scale developed and applied by previous researchers for measuring the relationship between these constructs. This approach warranted assurance to the reliability and validity of the instrument, as it was tested and accepted by many past researchers. To measure constructs under the psychological trait of N of Ach, this study utilized measurement scales developed by [64
] which comprise five items. The RTP measurement items were adapted from [65
], who used this scale to measure one of the features of entrepreneurial orientation. The scale contains five measurement items. For the construction of PercEU and PUF constructs, a measurement scale was borrowed from [66
], who studied consumer acceptance towards online banking in Finland. This scale contains four and five measurement items, respectively. Last but not least, intention was measured using a measurement scale developed by [17
]. This scale contains four measurement items. Meanwhile, the 5-point Likert scale was applied to measure the constructs, where number 1 indicates the lowest scale value representing a ‘strongly disagree’ view and number 5 points to the highest scale value representing a ‘strongly agree’ view. Prior to the collection of data through distribution of survey questions, a pilot test was conducted to confirm the items’ reliability and validity. In addition, pilot tests to further verify the reliability and validity of measurement items as measurement scales were also developed abroad on the basis of different social and cultural backgrounds.
A total sample of 302 respondents consisting of micro-entrepreneurs were selected using a random sampling method. The sample size of 302 was selected as suggested by [68
]. In addition, this study also obtained a list of SMEs from the Majlis Amanah Rakyat (People’s Trust Council), a government agency responsible for the development of rural entrepreneurs. Meanwhile, structural equation modeling (SEM) was utilized to analyze the relationships between psychological traits, PercEU, PUF, and intention and the use of e-commerce among micro-entrepreneurs. The best-known techniques within SEM are the partial least squares (PLS) approaches. PLS are typically used to evaluate theoretical models as depicted in Figure 1
, and are capable of simultaneously testing the relationship between indicators and latent variables (measurement models), and relationships between constructs (structural models), even in complex models [69
]. These advantages possessed by PLS explain why these approaches were the most appropriate mechanisms to analyze the data of this study. In addition, the use of PLS is also in line with the objective of the study, which is forecast oriented where a normal data distribution is not required.
This study incorporated entrepreneurial traits theory and TAM together to unravel the issue of the low e-commerce adoption rate among SMEs, in particular, the rural micro-entrepreneurs. For the purpose of this study, TAM, which commonly exploits PercEU and PUF constructs in predicting the intention to use technology, was modified with the incorporation of two new constructs, N of Ach and RTP. Both of these constructs were selected to serve as predictions for PercEU and PUF and to examine the extent to which entrepreneurs’ psychological traits influence the entrepreneurs’ perception on ease of use and usefulness of e-commerce. Notably, the results reveal that all seven hypotheses made earlier in the study are firmly supported by data. Indeed, N of Ach and RTP both yield a significant influence on the rural micro-entrepreneurial perceptions of the benefits and importance of technology in a business. Both these constructs confirm the idea that an entrepreneurs’ internal characteristics also play an important role in their eventual decision to adopt a specific technology for their businesses. Rural micro-entrepreneurs with a high N of Ach constantly see new things as opportunities and potential benefits that should be exploited to achieve their business plans and aspirations. In other words, the emergence of new innovations as a result of rapid technological changes is regarded as a provision of opportunities waiting to be exploited for rural micro-entrepreneurs with a clear direction and a high N of Ach. Furthermore, entrepreneurs with a high N of Ach are willing to carry out difficult and challenging tasks, as well as feeling confident that the tasks can in fact be accomplished. Results of their efforts symbolize rewards that give them the ultimate satisfaction and represent the key motivation for many successful entrepreneurs. This finding on N of Ach is in line with the finding of study by [73
], who found that the need of achievement is a driving factor for the creation of new e-commerce ventures. Thus, it clearly shows that N of Ach is a significant predictor to entrepreneurs’ perceptions of the benefits of e-commerce. As N of Ach in the TAM model has never been tested to measure its influence the usage on e-commerce among rural micro-entrepreneurs, and the findings of this study provide a new context in TAM and micro-entrepreneur studies.
On the other hand, the perspective of risks dictates that rural micro-entrepreneurs with a high RTP naturally dare to take up challenges and consistently find ways to succeed. With reference to this study, the adoption of e-commerce requires a relatively large amount of investments, and with limited skills, knowledge, and funds, the risk of adopting e-commerce is considered extremely high for rural micro-entrepreneurs. However, the results of this study indicate that rural micro-entrepreneurs with a high RTP can significantly influence their PercEU and PUF. Moreover, the results also indicate that RTP can positively influence PercEU and PUF, which can consequently affect the micro-entrepreneurs’ intention to adopt e-commerce. Thus, this thesis validates the existing studies positing that RTP are able to influence new venture decisions [5
]. The truth is that entrepreneurs with a high RTP do accept e-commerce as a necessity for their business development, as well as seeing it as a strategic tool for their business growth.
Predictably, both PercEU and PUF individually play a major role in influencing the decision to use e-commerce among rural micro-entrepreneurs. The results of this study are in line with other previous studies on the influence of PercEu and PU on dependent variables. A study by the authors of [76
] found that PercEU and PUF were two critical factors the success of M-commerce adoption among Taiwan’s entrepreneurs. The results also confirm the findings of a study conducted by the authors of [77
], who found that PEU has a strong relationship with e-commerce adoption among gen-z entrepreneurs in Indonesia. Despite the entrepreneurs’ obvious lack of skills and low level of education, PercEU and PUF successfully overcame major barriers that previously hindered the use of e-commerce among rural micro-entrepreneurs. In essence, positive PercEUs and PUF positively affect the PUF of e-commerce.
Theoretically, this study provides an understanding of the role of psychological factors on PerEU, PUF, and how they influence the intention to use e-commerce among rural entrepreneurs. Generally, this research provides two important implications for theory. First, the psychological factors and TAM literature are expanded through this research, which investigated the role of N of Ach and RTP in a TAM model predicting the intention to use e-commerce. This study argued that rural entrepreneurs are prepared to use e-commerce despite a lack of weakness if they are achievement oriented and risk takers. The role of these two variables has rarely been examined despite the importance of doing so. Secondly, this is the first study that empirically integrates and tests N of Ach and RTP as predictors to PercEU and PUF in TAM. Previous studies have focused more on the environmental factors and rarely consider these two variables. Thus, the findings of this study add to the literature on entrepreneurial psychological factors and TAM. The practical contribution of this study is to put a greater focus on enhancing the N of Ach and RTP of entrepreneurs, in order to increase the rate of technology adoption, in particular, e-commerce adoption. Active campaigns and a myriad of entrepreneurial culture programs for rural communities can also serve as forms of bold strategies employed to increase entrepreneurial self-motivation among rural micro-entrepreneurs. In addition, the rural micro-entrepreneurs’ desire to grow and thrive in business also needs to be further nurtured and enhanced. This is because one of the development barriers for many rural SMEs is the owner’s own preference to limit growth [7
]. Therefore, should this attitude remain unchanged, the adoption of a new technology like e-commerce will only serve as another obstacle for the government in their efforts to properly develop rural areas, despite the technology’s enormous potential as an enabler of rural development. The aggressive development of entrepreneurial attitudes and skills for rural micro-entrepreneurs is certainly needed to increase the viability and growth potentials of their businesses. This may include organizing programs that lead to the development of networking skills among micro-entrepreneurs so that information on not only business operations, but also on available government support programs, can be easily shared among themselves as they now view each other as peers. Plus, the programs can also be jointly organized with local business associations to guarantee a wider reach.
In addition, to ensure that micro-entrepreneurs are not left behind in the rapidly booming digital economy, a simple e-commerce platform that suits the size and nature of business preferences favored by rural micro-entrepreneurs must be urgently developed. Entrepreneurial development agencies and industry players are required to join hands to develop an e-commerce platform that can meet the needs of micro-businesses as well as suit their level of skills and education. Easy-to-operate software and gadgets enhance PercEU, which will inevitably have a positive impact on PUF, consequently increasing the tendency to use e-commerce among rural micro-entrepreneurs.
This study aimed to uncover the rural acceptance of micro-entrepreneurs towards the use of e-commerce in their business activities. Based on TAM and psychology theory, the findings of this study suggest that two entrepreneurial characteristics, namely N of Ach and RTP, are important elements in increasing the rate of e-commerce usage among rural entrepreneurs. The results of this study provide input that rural micro-entrepreneurs who have a high N of Ach and RTP have a high desire to use e-commerce as a tool to develop their business. Thus, this input is very meaningful and can be used by policy makers, business associations, and institutions of higher learning to design programs to increase the rate of e-commerce usage among entrepreneurs, particularly rural micro-entrepreneurs. This study also confirms the previous findings on the significant role of PUF and PercEU on consumer intentions towards technology adoption. In addition, this study reinforces TAM’s prediction capability on consumer behavior towards new technologies, especially that of rural entrepreneurs. Thus, the study suggests that TAM is a reliable theoretical model to address technology adoption issues among rural entrepreneurs. Furthermore, this study highlights the role of psychology traits in influencing rural entrepreneurs’ perception on e-commerce. Therefore, the rural economic development agencies should incorporate these two elements in any capacity building modules and rural entrepreneurship programs.
This study is not without limitations despite its significant contributions. The theoretical framework was developed to investigate the relationship of entrepreneurial psychological traits and PercEU and PU, which are the main drivers in TAM. However, this study did not measure the direct relationship between entrepreneurial psychological traits and intention. Moreover, this study also did not investigate the actual act towards e-commerce usage. Therefore, future studies are recommended to measure the influence of N of Ach and RTP on intention and the impact on actual usage. Overall, this study contributes to a better understanding on how psychological traits have positively carved perceptions on e-commerce among rural entrepreneurs, despite being surrounded by weaknesses such as a lack of infrastructure, shortness of funds, and less skills. The study also provides input that rural entrepreneurs are prepared to incorporate e-commerce technology in their business models, as it warrants business sustainability. This positive development permits rural entrepreneurs to continue as rural economic development champions.