The Determinants of Cloud-Based Services adoption and their impact on Collaborative Network Capability of SMEs in Pakistan: A Moderating Role of Innovative Capability

Abstract

The purpose of this study is to identify different factors for the adoption of cloud-based service and the development of collaborative network capabilities in SMEs by using an integrated model based on the Technology, Organization, and Environment (TOE) framework and Diffusion of Innovation (DOI) theory. The proposed model further explores the impact on the development of collaborative network capabilities and the role of innovative capabilities of Small and Medium Enterprises (SMEs). The primary data was collected using a well-developed questionnaire from the owners and managers of SME sectors in Pakistan (n=400). Generalized Structural Equation Model (GSEM) analysis was conducted to test the conceptual model using Stata. The analysis reveals significant influences on the adoption of cloud-based services and collaborative network capabilities within SMEs in Pakistan. Factors such as technological readiness, top management support, and regulatory support positively drive cloud-based services adoption. Conversely, concerns regarding security and complexity may act as barriers. Furthermore, the study highlights the positive association between cloud-based services adoption and firm's collaborative network capabilities, particularly when innovative features of cloud-based services are aligned with the firm's innovative capability.