Research Title: Factors Affecting E-Commerce Resistance Among SMEs in Ethiopia: A

Case Study of Addis Ababa

Author: Eldana Bekele

Affiliation: Addis Ababa University School of Commerce

Abstract

E-commerce offers many benefits for Small and Medium Enterprises (SMEs) in Addis Ababa,
Ethiopia, but its adoption is low due to various barriers. This study used a quantitative method to
survey SME owners and employees and identify the factors that hinder e-commerce adoption.
The results showed that e-commerce resistance is influenced by three groups of factors:
environmental, organizational, and technological. The study suggests that policy reforms,
capacity building programs, and targeted support are needed to overcome these barriers and
foster e-commerce development among SMEs, especially micro and small-sized ones.

Keywords: e-commerce, SMEs, environmental, organizational, and technological

Chapter 1

1.1 Background of the study

This study explores the factors affecting e-commerce adoption among micro, small, and medium
enterprises (SMEs) in Ethiopia, with a focus on Addis Ababa. Despite the benefits of e-
commerce, such as improved efficiency and customer satisfaction, its adoption is not uniform
across countries and sectors. In Ethiopia, SMEs, which contribute significantly to the economy,
show low levels of e-commerce adoption compared to other African countries. This low adoption
rate can be attributed to various technological, organizational, and environmental factors.
Technological factors include a lack of infrastructure and security concerns, while organizational
factors encompass financial constraints, limited digital literacy, and a perceived lack of benefits.
Environmental factors include regulatory and legal barriers, market maturity, consumer behavior,
and competitive pressures. The study aims to provide a deeper understanding of these factors to
help overcome the resistance to e-commerce adoption among SMEs in Ethiopia.

1.2 Statement of the problem

The problem statement of this study revolves around the low adoption rate of e-commerce
among SMEs in Ethiopia, particularly in Addis Ababa. Despite the potential benefits of e-
commerce, such as reducing transaction costs and expanding market reach, SMEs in Ethiopia
face significant barriers to its adoption. These barriers include lack of access to finance,
electricity, internet, skilled labor, awareness, trust, and supportive legal and regulatory
frameworks. This resistance to e-commerce adoption impacts the performance, productivity, and
competitiveness of SMEs, limiting their contribution to Ethiopia’s sustainable development
goals. The study aims to investigate these factors and provide insights to promote e-commerce
adoption among SMEs. It also addresses the gap in empirical studies examining e-commerce
resistance in SMEs in Ethiopia and the need for more comprehensive and context-specific
models that reflect the unique cultural, social, political, and environmental factors of developing
countries.

1.3 Research Question

Main Research Question

What are the Factors affecting e-commerce resistance among SMEs in Ethiopia Addis Ababa?

Specific research questions

1. What are the technological, organizational, and environmental factors that influence
Ecommerce resistance among SMEs in Ethiopia?
2. To what extent each determinant factor influences ecommerce resistance among SMEs in
Addis Ababa?
3. How does the level of resistance to e-commerce adoption vary among SMEs in different
sectors and size among SMEs in Ethiopia?

1.4 Objective of the study

General Objective

To identify and analyze the factors affecting e-commerce resistance resistance among SMEs in
Addis Ababa, Ethiopia.
 Specific Objectives

1. To identify and analyze the technological, organizational, and environmental, factors that
influence E-commerce resistance among SMEs in Ethiopia.
2. To determine the extent to which each determinant factor influences E-commerce
resistance among SMEs in Addis Ababa.
3. To compare and contrast the level of resistance to e-commerce adoption among SMEs in
different sectors and sizes in Ethiopia.

Chapter 2

Literature Review

2.1 Theoretical Review

The literature review for the study on “Factors affecting e-commerce resistance among SMEs in
Ethiopia: A Case Study of Addis Ababa” explores the concept of e-commerce, its benefits, and
its significance for SMEs, particularly within the Ethiopian context. The review also examines
various theoretical frameworks and models used to study e-commerce adoption and resistance,
such as the Unified Theory of Acceptance and Use of Technology (UTAUT), The Perceived e-
Readiness Model (PERM), Technology Acceptance Model (TAM), and Technology-
Organization-Environment (TOE) framework.

E-commerce, which encompasses activities like buying and selling goods and services,
electronic funds transfer, supply chain management, online marketing, and customer relationship
management, offers numerous benefits for businesses, especially SMEs. However, many SMEs
resist its adoption due to various barriers stemming from technological, organizational, and
environmental factors.

The review also discusses the role of SMEs in economic development and the challenges they
face in adopting e-commerce. Understanding the factors affecting e-commerce resistance among
SMEs is crucial for designing and implementing effective strategies to promote e-commerce
adoption.

The TOE model is identified as a suitable theoretical framework for studying the factors that
affect e-commerce resistance among SMEs in Ethiopia, as it considers three aspects of the
organizational context that influence technology adoption decisions: technology, organization,
and environment.
2.2 Empirical Review

The researcher used the TOE framework to categorize the factors that affect e-commerce
resistance among SMEs in Ethiopia into three dimensions: technological, organizational, and
environmental. These factors were derived from previous studies and the case study of Addis
Ababa. The researcher’s goal was to analyze the factors that influence e-commerce adoption by
SMEs in Ethiopia in a comprehensive and systematic way.

Security concerns refer to the fears and uncertainties of SMEs regarding the safety and integrity
of their data, transactions, and online operations when engaging in e-commerce activities (Gupta
& Purohit, 2018). Previous research has shown that security concerns are a significant barrier to
e-commerce adoption among SMEs, as they undermine trust in digital commerce and deter
SMEs from taking advantage of its benefits (Jyoti & Sharma, 2020; Khan et al., 2019). However,
some SMEs have overcome these challenges by implementing robust cybersecurity measures
and building trust in online transactions (Gebremedhin et al., 2020; UNCTAD, 2022a).

Hypothesis1: Security concerns increase SMEs’ resistance to e-commerce.

Technological infrastructure refers to the physical and organizational components that

enable e-commerce activities, such as internet connectivity, hardware, software, and
support services (Adugna, 2020). Previous research has shown that Ethiopian SMEs
face various challenges related to technological infrastructure, such as unreliable
internet and power supply, high cost and low availability of ICT equipment, and
security and operational issues (Alemayehu et al., 2019; Mulugeta, 2021). These
challenges limit SMEs’ access to e-commerce platforms, services, and customers, and
discourage them from taking advantage of e-commerce opportunities. However, some
SMEs have overcome these challenges by investing in technological infrastructure
and seeking external support and collaboration from various stakeholders (Tesfaye,
2019; UNCTAD, 2022b).
Hypothesis 2: Lack of technological infrastructure increases SMEs’ resistance to
e-commerce.

Limited awareness refers to the level of knowledge, understanding, and familiarity that SMEs
have regarding e-commerce (Liu & Wu, 2017). Previous research has shown that SMEs’
awareness of e-commerce influences their motivation, opportunities, and challenges to adopt and
leverage e-commerce effectively (Chen et al., 2021; Wang et al., 2020). Lack of awareness or
misconceptions about e-commerce’s potential value and relevance to their business increase
resistance towards digitalization. However, some SMEs have overcome these challenges by
participating in various awareness-raising initiatives, capacity-building programs, and
educational campaigns that equip them with the knowledge, skills, and confidence needed to
adopt and leverage e-commerce effectively (UNCTAD, 2022c; Data Reportal, 2023).

Hypothesis 3: Limited awareness increases SMEs’ resistance to e-commerce.:

Financial constraints refer to the limitations faced by SMEs in accessing capital and financial
resources for e-commerce investments (Tadesse, 2018). Previous research has shown that SMEs
often perceive e-commerce adoption as financially burdensome and risky due to high costs and
low returns (Chen et al., 2017; Karia & Asongu, 2018; Mahmood et al., 2019). These perceptions
discourage SMEs from pursuing e-commerce initiatives and hinder their competitiveness in the
digital marketplace. However, some SMEs have overcome these challenges by accessing
affordable financing and financial literacy programs that enable them to invest in e-commerce
effectively (Negera et al., 2019; UNCTAD, 2022d).

Hypothesis 4: Financial constraints increase SMEs’ resistance to e-commerce.

Digital literacy refers to the knowledge, skills, and confidence of SME owners and employees in
using digital technologies and e-commerce platforms effectively (Hailemariam & Dejene, 2017).
Previous research has shown that limited digital literacy hinders SMEs’ ability to utilize e-
commerce technologies and compete in the digital marketplace (Gebremedhin et al., 2020;
Meier, 2021; UNCDF & Ministry of Innovation and Technology in Ethiopia, 2020). These
limitations increase resistance towards digitalization. However, some SMEs have overcome
these challenges by investing in digital literacy training and capacity-building initiatives
(Tesfaye, 2019; UNCTAD, 20223).

Hypothesis5: Limited digital literacy increases SMEs’ resistance to e-commerce.

Perceived lack of benefits refers to SMEs’ subjective assessment that the advantages of e-
commerce do not outweigh the costs, risks, or efforts involved (Zhou et al., 2018). Previous
research has shown that SMEs often perceive limited benefits from e-commerce adoption in
terms of market expansion, competitiveness, operational efficiency, and customer engagement
(Liang & Huang, 2020; Ramayah et al., 2019). These perceptions increase resistance towards
digitalization. However, some SMEs have overcome these challenges by demonstrating and
communicating the tangible benefits and value proposition of e-commerce to their stakeholders
(Tesfaye, 2019; UNCTAD, 2022f).

Hypothesis 6: Perceived lack of benefits increases SMEs’ resistance to e-commerce.

Closed organizational culture refers to the shared values, beliefs, norms, and practices that shape
SMEs’ openness to innovation and technological change (Chen & Lai, 2018). Previous research
has shown that SMEs with rigid, hierarchical, and bureaucratic organizational cultures were less
likely to adopt e-commerce practices, as they hindered innovation and adaptation (Huang & Teo,
2019; Ngai et al., 2020). These cultures increase resistance towards digitalization. However,
some SMEs have overcome these challenges by promoting a culture of innovation and digital
readiness within their organizations (Tesfaye, 2019; UNCTAD, 2022g).

Hypothesis7: Closed organizational culture increases SMEs’ resistance to e-commerce.

Regulatory and legal barriers refer to the laws, regulations, and bureaucratic processes that
govern e-commerce activities, such as taxation, licensing, data protection, and consumer rights
(Kim & Lee, 2017). Previous research has shown that SMEs face various challenges related to
regulatory and legal barriers, such as compliance costs, legal uncertainties, and unclear
frameworks (Li & Huang, 2019; Oh & Lim, 2020). These challenges impede SMEs’ ability to
engage in e-commerce activities and increase resistance towards digitalization. However, some
SMEs have overcome these challenges by adapting to the changing regulatory environment and
seeking external support and collaboration from various stakeholders (Tesfaye, 2019; UNCTAD,
2022h).
Hypothesis8: Regulatory and legal barriers increase SMEs’ resistance to e-commerce.

Market maturity and consumer behavior refer to the development and sophistication of the
market and the attitudes and preferences of the consumers regarding e-commerce activities
(Wang & Yu, 2018). Previous research has shown that SMEs face various challenges related to
market maturity and consumer behavior, such as limited consumer trust, changing consumer
preferences, and intense competition (Xie et al., 2019; Zhang et al., 2020). These challenges
impede SMEs’ ability to leverage e-commerce platforms and increase resistance towards
digitalization. However, some SMEs have overcome these challenges by conducting market
research, educating consumers, and developing their market niches (Tesfaye, 2019; UNCTAD,
2022i).

Hypothesis9: Low market maturity and consumer behavior increase SMEs’ resistance to e-
commerce.

Low competitive pressures refer to the forces exerted by rival businesses in the market that
influence SMEs’ decisions to adopt e-commerce (Liu & Wu, 2017). Previous research has shown
that SMEs facing intense competitive pressures from digital-native firms and online rivals were
more motivated to adopt e-commerce strategies, as they perceived opportunities for enhancing
competitiveness and market positioning (Chen et al., 2021; Wang et al., 2020). These pressures
mitigate resistance towards digitalization. However, some SMEs have overcome these challenges
by developing and implementing effective e-commerce strategies and business planning
processes (Tesfaye, 2019; UNCTAD, 2022j).

Hypothesis10: Low competitive pressures increase SMEs’ resistance to e-commerce.

2.4 Conceptual Frame work

Chapter3

3.1 Introduction

This chapter describes the research design and methodology of the study on e-commerce
resistance among SMEs in Addis Ababa, Ethiopia. The study uses a quantitative approach based
on the TOE framework. The data is collected and analyzed through a survey questionnaire given
to SME owners and employees. The chapter also addresses the ethical issues, reliability, validity,
and implications of the research.

3.2 Research Approach

This study uses a quantitative research approach based on the TOE framework to examine the
factors affecting e-commerce resistance among SMEs in Addis Ababa, Ethiopia. The data is
collected through a survey questionnaire given to SMEs that have not adopted e-commerce,
using a criterion-based purposive sampling technique. The data is analyzed using descriptive and
inferential statistics. The quantitative research approach has some advantages and limitations,
which are discussed in relation to the literature. The study adopts a cross-sectional survey design,
which is suitable for measuring the current state and prevalence of e-commerce resistance among
SMEs

3.3 Research Design

This study uses an explanatory research design to explore why e-commerce resistance occurs
among SMEs in Addis Ababa, Ethiopia. This design investigates patterns and trends in existing
data from official sources and previous studies on e-commerce adoption and resistance among
SMEs in Ethiopia and other developing countries. The design is consistent with the quantitative
research approach and uses descriptive and inferential statistics to test the hypotheses based on
the TOE framework. The dependent variable is e-commerce resistance, and the independent
variables are technological, organizational, and environmental factors. The design also generates
novel insights and knowledge that can inform future research and policy interventions. The
design has some limitations and challenges, such as causality, confounding variables, and ethical
issues, which are addressed by using appropriate methods and procedures. The design is justified
by its suitability, relevance, and potential impact for this study.

3.4Data types and Data sources

This study uses quantitative data types and primary sources to collect and analyze the data.
Quantitative data types are numerical data that can be measured and compared using statistical
methods. Primary sources are original and firsthand information that is relevant and reliable for
the research topic. The researcher uses discrete and continuous data to measure e-commerce
resistance and its factors among SMEs, and survey questionnaires to collect data directly from
the SME owners and employees. The data types and sources are suitable, relevant, and impactful
for the study, but they also have some challenges and limitations, such as design, administration,
response, and ethical issues, which the researcher will address using appropriate methods and
procedures.

3.5 Population of the Study

This study investigates the factors of e-commerce resistance among SMEs in Addis Ababa,
Ethiopia, who have not adopted e-commerce. SMEs in Addis Ababa are a large and diverse
group of enterprises that operate in various sectors and contribute to the economic and social
development of the city and the country. The Ethiopian government defines SMEs as enterprises
that have 6-30 employees and a capital of 100,000-1.5 million birr. The population of the study is
relevant and accessible for the research topic, but it also poses some challenges and limitations,
such as access, contact, response, and ethical issues, which the researcher will address using
appropriate methods and procedures.

3.6 Sampling Procedure

This study uses purposive sampling, which is a non-probability sampling technique that selects a
sample based on the characteristics and objectives of the study. The researcher uses purposive
maximum variation sampling, which captures the diversity and heterogeneity of the population
by selecting cases that represent different sectors, sizes, and experiences of SMEs. The
researcher argues that purposive sampling is the most feasible and appropriate method for this
study, despite its limitations, such as low generalizability, high bias, and difficulty of validation.
The researcher selects a sample size of 135 SMEs, which is larger than the recommended range
for maximum variation sampling, to address the research question and objective. The sample size
is allocated to each subgroup based on the proportion of the population, using convenience or
judgment sampling. The researcher defines the sector and size of SMEs as follows:
manufacturing, retail, or service; and micro, small, or medium. The sampling method also has
some challenges and limitations, such as researcher bias, generalization, and representativeness,
which the researcher will address using appropriate methods and procedures. The sampling
method is justified by its suitability, relevance, and potential impact for this study.

3.7 Data Gathering Instruments

This study uses a survey questionnaire as the data collection method. The study collects
quantitative data from SME owners and employees in Addis Ababa, who are the main e-
commerce decision-makers and users. The study aims to explore the factors of e-commerce
resistance among SMEs in Ethiopia, which is an under-researched topic in developing countries.
The study uses quantitative data for its objectivity, reliability, and generalizability. The survey
questionnaire uses standardized and structured questions with a Likert scale format to measure e-
commerce resistance and its factors. The survey questionnaire is designed based on the literature
and the TOE framework. The survey questionnaire is administered face to face, online or by
mail, using purposive sampling. The survey data is analyzed using descriptive and inferential
statistics to test the hypotheses and answer the research questions.

3.8 Data Analysis Technique

This study uses SPSS software to analyze the quantitative data from the survey questionnaire.
The data analysis technique is consistent with the quantitative approach and the explanatory
design. The data analysis technique has two steps: descriptive statistics and inferential statistics.
Descriptive statistics measure the frequency and central tendency of the data, such as mean and
standard deviation. The researcher uses frequency tables, measures of central tendency, measures
of variability, and measures of association. Inferential statistics make predictions and conclusions
about the population based on the sample data. The researcher tests hypotheses and answers
research questions about the factors of e-commerce resistance. The dependent variable is e-
commerce resistance, and the independent variables are technological, organizational, and
environmental factors. The researcher uses correlation, regression, and one-way ANOVA to
measure the relationships and differences among the variables. The data analysis technique has
some challenges and limitations, such as choosing the right methods, dealing with errors and
outliers, and ensuring data accuracy and integrity. The researcher addresses these issues by using
appropriate methods and procedures. The data analysis technique is justified by its suitability,
relevance, and potential impact for this study.

3.9 Validity and Reliability

3.9.1 Validity

This study uses a survey questionnaire that has content validity to measure e-commerce
resistance and its factors among SMEs in Ethiopia. Content validity evaluates how well a
questionnaire covers all relevant parts of the construct it aims to measure (Scribbr, 2024). The
survey questions are based on the literature and the TOE framework, and are validated by
feedback from experts. The study also uses the content validity ratio (CVR), which measures the
agreement of experts on the relevance of each question (Lawshe, 1975). The CVR is determined
by the number of SME panelists and the Pearson correlation (Pearson, 1895). The questionnaire
is improved based on the feedback and the CVR values, and any questions that have low content
validity are modified or removed. This ensures that the questionnaire covers the construct of e-
commerce resistance and provides valid and reliable data.
3.9.2 Reliability

This study uses Cronbach’s alpha to test the reliability of the survey instrument that measures e-
commerce resistance and its factors among SMEs in Ethiopia. Reliability means that the
instrument produces consistent and accurate results. Cronbach’s alpha measures the internal
consistency of a set of items that measure the same construct. Cronbach’s alpha ranges from 0 to
1, with higher values indicating higher reliability. The researcher pilot tests the survey instrument
on a small sample of SMEs in Addis Ababa and calculates the Cronbach’s alpha coefficient for
each construct and for the overall instrument using a statistical software. The acceptable
threshold for Cronbach’s alpha is 0.7 or higher. The researcher removes or revises any items that
have low item-total correlation or reduce the Cronbach’s alpha coefficient. The researcher reports
the Cronbach’s alpha coefficient in the results section to show the reliability of the survey
instrument. The table below shows that the survey instrument has a good level of reliability for
measuring e-commerce resistance and its factors. This ensures that the data analysis results are
valid and credible. The researcher also acknowledges the limitations of the survey instrument,
such as measurement errors, response bias, or sampling bias, and suggests future research to use
other methods and explore other factors.
 3.9 Ethical Consideration

This study follows ethical principles and guidelines that ensure respect and responsibility
towards the participants and the research. These principles protect the rights, safety, and well-
being of the participants, and maintain the integrity and credibility of the research (Scribbr,
2021). The researcher considers the following ethical principles:

 Informed consent: the researcher informs the participants about the study and their right
to withdraw.
 Privacy and confidentiality: the researcher protects the participants’ personal information
and does not disclose it without their permission.
 Harm reduction: the researcher avoids causing any harm to the participants and
minimizes any potential risks, such as emotional distress, social stigma, or economic loss
(Scribbr, 2021a; ResearchMethod.net, 2023).
  Fairness and equity: the researcher does not discriminate against any group or individual
and treats all participants equally and fairly (Scribbr, 2021b; ResearchMethod.net, 2023).
 Cultural sensitivity: the researcher respects the cultural norms and values of the
participants and does not impose their own assumptions or biases on them. The
researcher also uses appropriate language and communication methods for the
participants’ cultural context (ResearchMethod.net, 2023; NIEHS, n.d.)

Chapter 4

Data Analysis, Presentation and Interpretation

4.1 Introduction

This chapter analyzes and presents the data from the survey of SMEs in Addis Ababa, Ethiopia.
The data is collected through a questionnaire and analyzed using descriptive and inferential
statistics. The chapter aims to understand the factors of e-commerce resistance among SMEs.
The chapter starts with the descriptive statistics, which summarize the data and identify patterns
and trends. Then, the chapter presents the inferential statistics, which include One-way ANOVA
and regression analyses to test the hypotheses and answer the research questions. The chapter
ends with a discussion of the findings, which provides a deeper understanding of e-commerce
resistance and offers guidance for future research. The chapter ensures the reliability and validity
of the findings and discusses their implications for academia and practice. The chapter provides
meaningful insights into the factors of e-commerce resistance and how to overcome them.

4.2 Descriptive Statistics

Descriptive statistics summarize and display the characteristics of a data set, such as the
distribution, central tendency, and variability of the values. Descriptive statistics help to
understand the data, identify patterns and trends, and present the results clearly and concisely.
The researcher uses descriptive statistics to describe the background and main variables of the
sample, such as sector, size, e-commerce resistance, and its factors. The researcher uses
frequency tables, measures of central tendency, measures of variability, and measures of
association.
4.2.1 Frequency tables

Frequency tables show how often each value or category of a variable occurs in a data set.
Frequency tables help to identify patterns, trends, and outliers in the data. The table below shows
the distribution of 135 SMEs in Addis Ababa by size and sector. The sample is equally divided
into three categories of size (micro, small, and medium) and three categories of sector
(manufacturing, retail trading, and service). The researcher used purposive sampling technique,
which involves selecting a proportional or equal number of units from each homogeneous group.
This technique improves the representativeness and precision of the sample, and allows for
comparisons across groups. The table also shows the number and percentage of observations for
each value of Role. Out of 135 observations, 70 are Owner and 65 are Employees. The
percentage of Owner is 51.9% and the percentage of Employees is 48.1%.

4.2.2 Measures of central tendency and dispersion

The study computed the mean and standard deviation for each factor of e-commerce resistance,
measured on a 5-point Likert scale. The descriptive statistics are shown in Table 3. The mean
values indicate the average level of agreement with each factor among the SMEs. The higher the
mean value, the more the SMEs agree that the factor influences their e-commerce resistance. The
standard deviation values indicate the variability or spread of the responses for each factor. The
lower the standard deviation value, the more the responses are consistent and less spread out. The
data set has 135 observations for 11 variables related to e-commerce resistance among Ethiopian
SMEs. E-commerce resistance is the dependent variable, and the other 10 variables are the
independent variables that may influence e-commerce resistance. The study interprets the data
based on the classification system of Zaidaton and Bagheri (2009), which uses the mean score to
categorize the variables as low, moderate, or high. All the variables have a high mean score,
meaning that the respondents strongly agree or agree with the statements related to each variable.
The highest mean score is for E-commerce Resistance, followed by Low Market Maturity and
Consumer Behavior, and Limited Awareness and Limited Digital Literacy. The lowest mean
score is for Financial Constraints, followed by Perceived Lack of Benefits, and Regulatory and
Legal Barriers. The lowest standard deviation is for Limited Digital Literacy, followed by
Limited Awareness, and Financial Constraints. The highest standard deviation is for Security
Concerns, followed by Regulatory and Legal Barriers, and Low Competitive Pressures.

4.2.3 Chi-square test

The researcher used chi-square tests to test the association between the size or sector of the
SMEs and their e-commerce resistance. The chi-square test compares the observed and expected
frequencies of the categories in a table. The p-values for both tests are less than 0.001, which
means that the size or sector of the SMEs and their e-commerce resistance are significantly
associated. This means that the e-commerce resistance varies by size or sector. The researcher
tested this data to understand how the size or sector affects the e-commerce resistance and to
identify the patterns and factors in the data. The researcher used this data to make decisions or
predictions about e-commerce and SMEs in Ethiopia.

4.3 Inferential Statistics

The researcher uses inferential statistics to make inferences about SMEs in Addis Ababa,
Ethiopia, from the sample data. Inferential statistics help us make predictions and conclusions
about a population from a sample (Scribbr, 2021c). We use correlation, regression, and one-way
ANOVA as inferential statistics.

4.3.1 Correlation

Correlation measures how strongly two variables are linearly related, from -1 (perfect negative
relationship) to 1 (perfect positive relationship). Significance level measures how likely the
correlation is due to chance, with lower values indicating higher confidence. A common
threshold for significance is 0.05. The table below shows the Pearson correlation coefficient and
the significance level for each factor.

The results of this study shows that all the factors have a positive and significant relationship
with e-commerce resistance, meaning that as the factors increase, e-commerce resistance also
increases, and vice versa. However, the strength of the relationship varies across the factors. The
strongest relationship is between security concerns and e-commerce resistance, with a correlation
coefficient of 0.526. The weakest relationship is between closed organizational culture and e-
commerce resistance, with a correlation coefficient of 0.290. The other factors have moderate
relationships, with correlation coefficients ranging from 0.325 to 0.453. These results suggest
that the factors of e-commerce resistance are important and relevant for SMEs in Ethiopia.

4.3.2 Multiple Linear Regression

Multiple linear regression predicts the outcome of a variable from several explanatory variables.
It models the relationship between the variables. In this study, multiple linear regression will
measure how e-commerce resistance is related to technological, organizational, and
environmental factors.

4.3.2.2 Regression Analysis

Regression analysis estimates the relationship between a dependent variable and one or more
independent variables. It helps to describe how changes in the independent variables affect the
dependent variable. In this study, regression analysis measures the relationship between e-
commerce resistance and its factors among SMEs in Addis Ababa. It also explores the
interactions and synergies among the factors, providing insights into the complex dynamics of e-
commerce resistance. The table below shows the model summary of the regression analysis,
which provides some information about the quality and fit of the model.

Table 1 Regression Model Summary

Model Summaryb
Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .921a .848 .843 3.51696

Source: Spss 2024

The model summary shows that:

  The R value is 0.921, which indicates a very strong positive correlation between the
factors and e-commerce resistance.
 The R Square value is 0.848, which means that about 84.8% of the variance in e-
commerce resistance can be explained by the factors in the model.
 The Adjusted R Square value is 0.843, which is very close to the R Square value,
indicating that the model does not have many irrelevant factors.
 The Std. Error of the Estimate is 3.51696, which means that the observed values are on
average 3.51696 units away from the predicted values.

4.3.2.3 Analysis of Variance (ANOVA)

The ANOVA table shows the results of the regression analysis on Ecommerce Resistance. The
model has 10 factors and 135 SMEs. The ANOVA table tests whether the model is significant at
explaining Ecommerce Resistance. It compares the variance explained by the model
(Regression) to the variance not explained by the model (Residual). The F-value is the ratio of
the mean squares of Regression and Residual. It measures how well the model fits the data. A
high F-value and a low p-value mean that the model is significant and that some factors have a
significant effect on Ecommerce Resistance. The ANOVA table shows that the F-value is 61.538
and the p-value is less than 0.001, which means that the model is significant and that the factors
have a significant influence on Ecommerce Resistance.

Table 2 Anova

ANOVAa
Model Sum of Squares df Mean Square F Sig.
1 Regression 76.626 10 5.063 61.538 .000b
Residual 37.014 125 12.369
Total 113.671 135

Source: Spss 2024

4.3.2.5 Results of the regression analysis

The table below shows the results of the regression analysis that measures the influence of each
factor on e-commerce resistance among SMEs in Addis Ababa. The factors are ranked by their
standardized coefficients, which show the relative strength and direction of their effect on e-
commerce resistance. The significance levels show the statistical confidence of the effect, with
lower values indicating higher confidence.
Table 3 Regression Coefficients

Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .233 .187 3.710 .000
Security Concerns .461 .457 .368 3.082 .000
Lack of Technological .424 .461 .334 4.183 .000
Infrastructure
Limited Awareness .453 .414 .390 4.954 .000
Financial Constraints .280 .417 .243 2.728 .000
Limited Digital Literacy .385 .421 .324 3.144 .000
Perceived Lack of Benefits .322 .437 .255 3.373 .000
Closed Organizational .277 .448 .216 3.198 .000
culture
Regulatory and Legal .395 .452 .321 3.726 .000
Barriers
Low Market Maturity and .472 .425 .483 4.455 .000
Consumer Behavior
Low Competitive Pressures .404 .433 .325 9.337 .000
a. Dependent Variable: Ecommerce Resistance

Source: Spss 2024

 All the factors have a positive and significant effect on e-commerce resistance, meaning
that they all increase the resistance of SMEs to adopt e-commerce.
 The most influential factor is low market maturity and consumer behavior, followed by
limited awareness and security concerns. These factors reflect the external and internal
challenges that SMEs face in adopting e-commerce, such as lack of demand, information,
and trust.
 The least influential factor is closed organizational culture, followed by financial
constraints and perceived lack of benefits. These factors reflect the internal and
 subjective barriers that SMEs face in adopting e-commerce, such as resistance to change,
cost-benefit analysis, and risk aversion.
 The results suggest that e-commerce resistance among SMEs in Addis Ababa is a
complex and multifaceted phenomenon that requires a comprehensive and holistic
approach to overcome. The approach should address the technological, organizational,
and environmental factors that influence e-commerce resistance, as well as the
interactions and synergies among them.

4.3.2.5 Hypothesis Testing

H1: Security Concerns Increase SMEs’ Resistance to E-commerce. (Accepted, β = 0.368, p <
0.001, R2 = 0.036)

H2: Lack of Technological Infrastructure Increases SMEs’ Resistance to E-commerce.

(Accepted, β = 0.334, p < 0.001, R2 = 0.033)

H3: Limited Awareness Increases SMEs’ Resistance to E-commerce. (Accepted, β = 0.390, p <
0.001, R2 = 0.039)

H4: Financial Constraints Increase SMEs’ Resistance to E-commerce. (Accepted, β = 0.243, p <
0.001, R2 = 0.024)

H5: Limited Digital Literacy Increases SMEs’ Resistance to E-commerce. (Accepted, β = 0.324,
p < 0.001, R2 = 0.032)

H6: Perceived Lack of Benefits Increase SMEs’ Resistance to E-commerce. (Accepted, β =

0.255, p < 0.001, R2 = 0.025)

H7: Closed Organizational Culture Increase SMEs’ Resistance to E-commerce. (Accepted, β =

0.216, p < 0.001, R2 = 0.021)

H8: Regulatory and Legal Barriers Increase SMEs’ Resistance to E-commerce. (Accepted, β =
0.321, p < 0.001, R2 = 0.032)
H9: Low Market Maturity and Consumer Behavior Increase SMEs’ Resistance to E-commerce.
(Accepted, β = 0.483, p < 0.001, R2 = 0.048)

H10: Low Competitive Pressures Increase SMEs’ Resistance to E-commerce. (Accepted, β =

0.325, p < 0.001, R2 = 0.033)\

All hypotheses are supported by the coefficient table and previous studies. Security Concerns,
Lack of Technological Infrastructure, Limited Awareness, Financial Constraints, and Limited
Digital Literacy are significant predictors of SMEs’ Resistance to E-commerce. These factors
hinder SMEs’ e-commerce adoption due to perceived risks, challenges, and limitations .

4.3.3 One-way Anova

The ANOVA test shows that SMEs’ size (micro, small, or medium) significantly affects their
ecommerce resistance (F = 2459.704, p < .001). The post hoc test shows that all pairs of groups
have significant mean differences, with micro-sized SMEs having the highest ecommerce
resistance (mean = 4.97), followed by small-sized SMEs (mean = 4.38), and medium-sized
SMEs (mean = 4.56).

The ANOVA test shows that SMEs’ sector (manufacturing, retail trading, or service) does not
significantly affect their ecommerce resistance (F = 1.265, p = .286). The post hoc test shows
that none of the pairs of groups have significant mean differences, and that SMEs in different
sectors have similar levels of ecommerce resistance. This could be due to various factors that
affect the ecommerce environment and adoption across sectors

4.4 Discussion of Results

This study investigates the factors affecting e-commerce resistance among SMEs in Addis
Ababa, Ethiopia. The factors are categorized into technological, organizational, and
environmental. All these factors positively affect e-commerce resistance, with the strongest being
market maturity and consumer behavior, and the weakest being technological infrastructure. The
study also reveals that the size of the SMEs significantly influences e-commerce resistance, with
micro-sized SMEs showing the highest resistance. However, the sector in which the SMEs
operate does not significantly affect their e-commerce resistance. The study concludes that
 addressing these barriers strategically can reduce e-commerce resistance and promote its
adoption among SMEs in Ethiopia

Chapter 5

Summary, Conclusion, and Recommendation

the study summarizes the findings, conclusions, and recommendations regarding e-commerce
resistance among SMEs in Addis Ababa, Ethiopia. The study identifies technological,
environmental, and organizational factors as key determinants of e-commerce resistance. It also
reveals that SME size significantly influences e-commerce resistance, but the sector does not.
The study recommends policy interventions, financial support, education and training,
technological infrastructure development, and tailored strategies to address these challenges. It
also suggests areas for future research, including cross-cultural studies, longitudinal studies,
impact of government policies, case studies, technological innovations, role of education,
psychological factors, impact of COVID-19, and comparative analysis. The goal is to reduce e-
commerce resistance and promote its adoption among SMEs in Ethiopia.

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