Impact of E-Commerce Implementation on Business Performance of SMEs: Assessing the Mediating Role of Organizational Sustainability and Competitive Advantage

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Nazia Sultana, Ragu Prasadh Rajendran, Niraj Kishore Chimote, Rakesh Kumar, Shahid Amin, Noria Farooqui

Abstract

Small and Medium Enterprises (SMEs) play a vital role in the economic development of many countries, contributing significantly to employment, innovation, and GDP growth. However, a large percentage of SMEs fail within a few years of their incorporation, highlighting the need to understand the factors that drive their success and sustainability. One key factor that has gained increasing attention in the literature is the implementation of e-commerce (ECI) by SMEs. While there is a growing literature on the impact of e-commerce implementation (ECI) on the business performance of SMEs (BPSMEs), there is a scarcity of empirical research on mediating role of organizational sustainability (OS) and competitive advantage (CA) between ECI and BPSMEs. To address this gap, the present study aims to examine the impact of e-commerce implementation (ECI) on the business performance of SMEs (BPSMEs), and the mediating role of organizational sustainability (OS) and competitive advantage (CA) in this relationship. The study employs a sample size of 453 units and utilizes normality test to check frequency distribution is normally distributed. Exploratory factor analysis (EFA) was conducted to identify the key factors influencing ECI in SMEs, and Cronbach's alpha was used to assess the reliability of the measures. Multiple linear regression analysis was used to assess the impact of ECI on BPSME, with OS and CA as mediating variables. The results indicate that E-Commerce Implementation (ECI) has a significant direct impact (coefficient = 0.817) on Business Performance of SMEs (BPSMEs), with Organisational Sustainability (OS), and Competitive Advantage (CA) serving as crucial mediators. Specifically, Organisational Sustainability (OS) acts as a mediator, with Competitive Advantage (CA), emphasizing their substantial indirect impacts on Business Performance of SMEs (BPSMEs). The findings suggest that SMEs can significantly improve their growth by incorporating e-commerce as a core part of their marketing initiatives. By elucidating the mechanisms through which E-Commerce Implementation (ECI) influences Business Performance of SMEs (BPSMEs), this study offers practical insights for organizational leaders seeking to capitalize on the strategic advantages of e-commerce to drive long-term, sustainable growth and performance improvements within their firms. This research contributes to a more comprehensive understanding of the downstream impact of E-Commerce Implementation on overall Business Performance within the SME context and validating the mediation model - offering important implications for managers to consider as they navigate the complexities of digital transformation.

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How to Cite
Nazia Sultana, Ragu Prasadh Rajendran, Niraj Kishore Chimote, Rakesh Kumar, Shahid Amin, Noria Farooqui. (2024). Impact of E-Commerce Implementation on Business Performance of SMEs: Assessing the Mediating Role of Organizational Sustainability and Competitive Advantage. European Economic Letters (EEL), 14(3), 2125–2137. https://doi.org/10.52783/eel.v14i3.1985
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