The Effect of The Technology Organization Environment (TOE) Framework and Diffusion of Innovation (DOI) Theory on The Business Performance of Micro Enterprises in Emerging Economies: Evidence from Indonesia

Abstract

This study aims to analyze how technological, organizational, environmental, and individual context effect Micro Enterprises’ e-commerce adoption and its impact on business performance in Indonesia’s emerging economy.  This study employs a quantitative approach using the Structural Equation Model - Partial Least Squares (SEM-PLS), integrating the Technology-Organization-Environment (TOE) framework and the Diffusion of Innovation (DOI) theory. Data were obtained from 158 Micro Enterprises who use Shopee market place through questionnaires using a purposive sampling. The findings show that technological, organizational, and individual context directly affect e-commerce adoption, while environmental context does not. The findings also show that e-commerce adoption has a direct effect on the business performance of Micro Enterprises, and mediates the relationship between technological, organizational, and individual context on the business performance of Micro Enterprises. However, it does not mediate the relationship between environmental context and business performance. This study contributes to the development of digital marketing literature, particularly the determinants of technology adoption among Micro Enterprises, as well as to provide practical contribution for Micro Enterprises and policymakers in accelerating digital transformation in Indonesia’s emerging economy.