Page 1 of 17
Advances in Social Sciences Research Journal – Vol. 11, No. 11
Publication Date: November 25, 2024
DOI:10.14738/assrj.1111.17847.
AL-Ghaili, M., Mahomed, A. S. B., & Yusof, R. N. R. (2024). Driving Digital Transformation: The Impact of SME Digitalization on
Technology Acceptance and Usage in Small and Medium Enterprises of Yemen. Advances in Social Sciences Research Journal, 11(11).
89-105.
Services for Science and Education – United Kingdom
Driving Digital Transformation: The Impact of SME Digitalization
on Technology Acceptance and Usage in Small and Medium
Enterprises of Yemen
Mohammed AL-Ghaili
School of Business and Economics, UPM, Malaysia
Anuar Shah Bali Mahomed
School of Business and Economics, UPM, Malaysia
Raja Nerina Raja Yusof
School of Business and Economics, UPM, Malaysia
ABSTRACT
This research investigates the relationships between digitalization, perceived
usefulness, attitudes toward using technology, and actual system use of
technologies within the context of small and medium-sized enterprises (SMEs) in
Yemen. Using a two-step structural equation modelling approach, the research
investigates both direct and mediating effects. Data were gathered from 392 SMEs
in Yemen by employing a survey research design. The measurement model was
estimated to evaluate the constructs' accuracy, while the structural model was
analyzed to investigate the proposed relationships. Findings reveal that SME
digitalization significantly enhances perceived usefulness, which positively
influences users' attitudes toward technology adoption and subsequently drives
actual system use. Specifically, the analysis shows that improvements in
digitalization practices lead to heightened perceptions of usefulness and favorable
attitudes, ultimately resulting in increased actual system use. Moreover, the results
indicate that perceived usefulness and attitudes serve as significant mediators
between digitalization and system use. This research contributes to understanding
how enhancing perceived usefulness and fostering positive attitudes can facilitate
technology adoption in SMEs, providing important implications for practitioners,
policymakers, and researchers focused on digital transformation. Overall, the
findings emphasize the importance of strategic digitalization efforts to improve
operational efficiency and promote successful technology acceptance in small and
medium enterprises.
Keywords: Technology Acceptance Model, SME Digitalization, Perceived Usefulness,
Attitude Toward Using, Actual System Use.
INTRODUCTION
In the ever-evolving digital landscape, the successful integration of technology has become a
crucial factor for the growth and sustainability of Small and Medium Enterprises (SMEs). The
influence of SME digitalization on the attitude toward using and actual system use of technology
remains a crucial topic of research, especially in the context of developing countries like Yemen.
SMEs play a crucial role in the economic development of Yemen, contributing to employment
Page 2 of 17
90
Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 11, November-2024
Services for Science and Education – United Kingdom
generation and economic growth. However, SMEs in Yemen have lagged in adopting digital
technologies compared to their larger counterparts [1, 2]. The digital transformation of SMEs
in Yemen faces several challenges, including a lack of capital, shortage of skilled staff, and
limited technological resources [3, 4]. Mainly, the ongoing development of the digital economy
has caused SMEs in Yemen to face significant dilemmas in digital transformation across three
dimensions: technology, organization, and environment [5, 6]. SMEs in Yemen often lack the
digital transformation awareness due to their limited knowledge reserves and management
capacity, leading to a digital divide between large enterprises and SMEs in the country.
However, SMEs play a crucial role in Yemen's economy, significantly contributing to
employment, income generation, and overall economic stability. Recent reports indicate that
SMEs represent approximately 99.6% of all businesses in Yemen, underscoring their
dominance in the economic landscape [7-9]. This substantial presence translates into
qualitative impacts, such as job creation and poverty alleviation, which are vital in a country
facing numerous socio-economic challenges [10, 11]. The importance of SMEs in Yemen
extends beyond their sheer numbers. They are pivotal in fostering economic growth and
development. For instance, SMEs have been identified as key drivers of innovation and strategic
performance within the manufacturing sector, which is essential for enhancing
competitiveness in the global market [12-14]. Economic contribution is critical, especially in a
context where larger enterprises may not be as prevalent or effective in addressing local
market needs.
Moreover, SMEs are instrumental in promoting sustainable development in Yemen. They
contribute to various dimensions of sustainability, including economic, social, and
environmental aspects [8]. The empirical study conducted by Ghaleb and Ekrem [15] highlights
the role of SMEs in enhancing sustainable development indicators, which is crucial for the long- term viability of the Yemeni economy. Additionally, the integration of innovative practices
within SMEs can lead to improved operational efficiencies and better market responsiveness,
further solidifying their role in economic resilience [9, 12].
Despite their importance, SMEs in Yemen face numerous challenges, including limited access
to financing, inadequate infrastructure, and a lack of skilled labor [16]. The role of microfinance
institutions has been highlighted as a potential solution to these barriers, providing essential
business development services that can enhance the operational capabilities of SMEs [17, 18].
Furthermore, the digitalization of SMEs is seen as a pathway to overcoming some of these
challenges, enabling businesses to reach broader markets and improve their service delivery
[16, 19].
SMEs in Yemen also face significant challenges in adopting technologies, which significantly
hampers their growth and competitiveness. These challenges can be broadly categorized into
financial constraints, infrastructural deficiencies, lack of skilled personnel, and socio-cultural
barriers. One of the most pressing issues is the lack of financial resources [4-6]. Many SMEs in
Yemen struggle to secure adequate funding for technology adoption due to limited access to
credit and high-interest rates [18]. This financial barrier is compounded by the overall
economic instability in the country, which discourages investment in new technologies. As
noted by Hussein Alghushami, Zakaria [20], the scarcity of financial resources is a critical
impediment to the adoption of cloud computing and other modern technologies in various
Page 3 of 17
91
AL-Ghaili, M., Mahomed, A. S. B., & Yusof, R. N. R. (2024). Driving Digital Transformation: The Impact of SME Digitalization on Technology
Acceptance and Usage in Small and Medium Enterprises of Yemen. Advances in Social Sciences Research Journal, 11(11). 89-105.
URL: http://dx.doi.org/10.14738/assrj.1111.17847
sectors, including SMEs. Furthermore, the high costs associated with acquiring and
implementing new technologies can deter SMEs from pursuing digital transformation [21, 22].
In addition to financial constraints, the technological infrastructure in Yemen is often
inadequate. Many SMEs operate in environments where internet connectivity is unreliable, and
access to necessary technological tools is limited [6, 16]. This lack of infrastructure not only
hinders the adoption of e-business solutions but also affects the overall efficiency and
productivity of these enterprises. The study by Saleh and Manjunath [1] highlights that the
technological landscape in Yemen is still developing, which poses significant challenges for
SMEs aiming to integrate advanced technologies into their operations. Another significant
barrier is the shortage of skilled labor. Many SMEs lack employees who are trained in modern
technologies, which creates a gap in the knowledge required for effective technology adoption
[3-6, 16]. The absence of qualified personnel to implement and maintain new systems can lead
to resistance among SME owners and managers, who may feel overwhelmed by the
complexities of new technologies [20, 21, 23]. This situation is exacerbated by the general
educational deficiencies in the country, which limit the availability of a skilled workforce
capable of driving technological innovation within SMEs [18, 24].
Socio-cultural factors also play a critical role in the challenges faced by SMEs in Yemen. There
is often a lack of awareness regarding the benefits of technology adoption, which can lead to
resistance to change among business owners [16]. Additionally, cultural attitudes towards
technology and innovation may hinder the willingness of SMEs to invest in new systems, as
traditional practices are often deeply ingrained in the business culture [20]. The fear of
unemployment resulting from automation and technological advancements further
complicates the situation, as employees may resist changes that threaten their job security [21,
25].
The literature on the impact of digitalization on SMEs in Yemen reveals a significant gap
regarding how digitalization influences attitudes toward technology use and actual system
usage. While there is a growing body of research on digital transformation and its benefits for
SMEs globally, specific studies focusing on the Yemeni context remain scarce. Digital
transformation is recognized as a critical factor for enhancing the performance of SMEs, with
various studies indicating that the adoption of digital technologies positively impacts
operational efficiency and competitive advantage [26-28]. However, the relationship between
digitalization and user attitudes, particularly in the context of Yemeni SMEs, has not been
thoroughly explored. For instance, while Teng, Wu [29] emphasize the foundational role of
digital technologies in the transformation process, they do not specifically address how these
technologies affect user perceptions and attitudes within specific cultural and economic
contexts like Yemen.
Moreover, the Technology Acceptance Model (TAM) has been widely used to understand
technology adoption, highlighting the importance of perceived usefulness and perceived ease
of use as critical determinants of user acceptance [30, 31]. However, studies that explicitly
apply this model to Yemeni SMEs and investigate how digitalization influences these
perceptions are limited. For example, while literature also discusses the performance outcomes
of digitalization in SMEs, it lacks a focus on the mediating role of perceived usefulness and ease
of use in shaping attitudes toward technology adoption [26, 32]. Additionally, the challenges
Page 4 of 17
92
Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 11, November-2024
Services for Science and Education – United Kingdom
faced by SMEs in adopting digital technologies, such as financial constraints and infrastructural
deficiencies, are well-documented [1, 33]. However, the specific impact of these challenges on
perceived usefulness and ease of use, and consequently on attitudes toward technology, has not
been adequately addressed in the literature. This gap is critical, as understanding these
relationships could provide insights into how to better support Yemeni SMEs in their digital
transformation journeys.
Furthermore, while some studies have explored the external factors influencing technology
adoption, such as competitive pressure and market dynamics, the internal factors related to
user attitudes and perceptions remain under-researched [34]. This is particularly relevant in
the Yemeni context, where socio-cultural factors may significantly influence attitudes toward
technology use. In general, the existing literature highlights the significant impact of perceived
usefulness and ease of use on the adoption and utilization of technology within SMEs. However,
the specific mechanisms by which digitalization influences these perceptions and subsequent
technology usage are not well understood, particularly in the Yemeni context [35]. The existing
literature indicates a clear gap in understanding how digitalization impacts attitudes toward
using technology and actual system use among Yemeni SMEs, particularly through the
mediating roles of perceived usefulness and ease of use. Future research should aim to fill this
gap by exploring these relationships in depth, considering the unique socio-economic and
cultural context of Yemen.
Hence, this research aims to investigate the influence of SME digitalization on attitude toward
using and actual system use of technology, with a specific focus on the mediating roles of
perceived usefulness and ease of use. The study builds on the Technology Acceptance Model as
the theoretical framework, which has been successfully tested in the Yemeni context [36].
Survey-based research is employed within SMEs in Yemen, exploring the relationships between
digitalization, perceived usefulness, perceived ease of use, attitude toward using, and actual
system use. The findings of this study contribute to the existing body of knowledge by providing
empirical evidence on the intricacies of the digitalization-technology adoption process in
Yemeni SMEs.
The remaining sections of research are arranged as follows: The theoretical framework and
development of the hypotheses are presented in Section Two. The methodology of the study is
presented in detail in Section Three, and the data analysis and findings are covered in Section
Four. A discussion and the research's conclusion are given in the final sections.
THEORETICAL BACKGROUND
This study examines how digitalization affects Yemeni entrepreneurs' attitudes toward using
technology and their actual system usage, focusing on the mediation effects of perceived
usefulness. The research is framed using the Technology Acceptance Model (TAM), which offers
a solid base for understanding how technology is adopted and integrated within SMEs.
Originally developed by Davis, Bagozzi [37], TAM has been widely used in many studies to
explore how users adopt new technologies. It is rooted in the Theory of Reasoned Action (TRA)
Ajzen [38] and the Theory of Planned Behavior (TPB) [39]. TAM highlights perception of
usefulness as a key factor that determine user intentions and behavior toward technology
adoption [37]. Perceived Usefulness refers to how much a person believes that using a
particular technology will improve their performance [37]. According to TAM, perceived
Page 5 of 17
93
AL-Ghaili, M., Mahomed, A. S. B., & Yusof, R. N. R. (2024). Driving Digital Transformation: The Impact of SME Digitalization on Technology
Acceptance and Usage in Small and Medium Enterprises of Yemen. Advances in Social Sciences Research Journal, 11(11). 89-105.
URL: http://dx.doi.org/10.14738/assrj.1111.17847
usefulness directly influences users’ intention to adopt technology [35]. This connection
suggests that when people find technology easy to use, they are more likely to see its benefits,
which increases the chances of adoption [40].
The main components of TAM include Perceived Ease of Use, Perceived Usefulness, Attitude
Toward Use, Behavioral Intention to Use, and Actual System Use [41]. External factors, such as
personal characteristics, organizational settings, and environmental influences, can also impact
these perceptions, making TAM a flexible model that fits many different situations [42].
Research has often shown that perceived usefulness has a bigger impact on user behavior than
ease of use, with usefulness being the strongest indicator of technology acceptance [43, 44].
Furthermore, users' views on how effortless technology is and how much it boosts their
performance greatly shape their attitude and willingness to adopt it [45]. This study uses TAM
to evaluate Yemeni entrepreneurs' attitudes toward technology adoption, by incorporating
SME digitalization as organizational setting factor along with TAM variables, such as perceived
usefulness, attitude toward using, and actual system use to understand technology adoption.
By using this integrated model, the study explores how individuals' perceptions of the
usefulness of technology-shaped by their organizational context-drive digitalization in Yemeni
SMEs. This theoretical approach aims to offer practical insights on how to overcome obstacles
to digital entrepreneurship in developing economies.
LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT
SME Digitalization and Perceived Usefulness
In the context of Yemeni SMEs, SME Digitalization and Management factors, specifically the
opportunities to exploit the market and the integration of technology and innovation, play a
crucial role in forming the perceived usefulness of technology among Yemeni entrepreneurs
[46, 47]. This perception is the key component of the technology acceptance model, influencing
Yemeni entrepreneurs' attitudes toward technology and its actual system use [48]. Moreover,
exploiting market opportunities through digital means is seen as a significant advantage of
digitalization, enhancing these technologies' perceived usefulness [49]. Besides, when Yemeni
entrepreneurs recognize that digital tools can open new market paths for SMEs, improve
customer reach, and provide competitive visions, their inclination to adopt SME digitalization
will be increased [50].
Similarly, combining technology and innovation within SME operations is perceived as a
compound for business growth and efficiency, further supporting the perceived usefulness of
digital tools [51]. Due to that, perceived usefulness positively impacts the attitude of Yemeni
entrepreneurs toward technology adoption, leading to a greater possibility of its actual usage
[52, 53]. Additionally, the actual application of these technologies is effective in realizing the
benefits of SME digitalization and management factors, thereby facilitating digital
transformation in Yemen [54]. Therefore, this relationship emphasizes the importance of
aligning digitalization strategies with market exploitation opportunities and innovative
practices to enhance the perceived value and actual utilization of technology in Yemeni SMEs
[46, 47, 55]. Therefore, this study posits the following hypothesis:
➢ H1. SME Digitalization and Management has a positive influence on the perceived
usefulness of technology.
Page 6 of 17
94
Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 11, November-2024
Services for Science and Education – United Kingdom
Perceived Usefulness and Attitude Toward Using
Perceived usefulness is the degree to which an individual believes technology will enhance a
Yemeni entrepreneur's performance by driving digital entrepreneurship and digitalization
management among Yemeni SMEs [20, 46, 48] Moreover, research suggests that when
entrepreneurs perceive technology as valuable and relevant to their business goals, it becomes
good support with a positive attitude toward using technology and leads to actual system use
among Yemeni entrepreneurs [37, 47]. Also, this increase in system use directly impacts
digitalization management by enabling efficient operations with improved decision-making of
SMEs and enhanced business operations in Yemen [56]. Therefore, addressing these challenges
through targeted involvement and a capacity-building strategy program is central to unlocking
the full potential of digital entrepreneurship and empowering Yemeni SMEs in the globalized
economy [47, 50, 56]. Therefore, this study posits the following hypothesis:
➢ H2: Perceived usefulness of technology acceptance has a positive influence on attitude
towards using.
Attitude Towards Using and Actual System Use
The relationship between the attitude towards using technology and actual system use plays a
central role in the use of SME digitalization management among Yemeni entrepreneurs [16, 37,
56]. Moreover, this relationship is supported by the technology acceptance model that assumes
a good attitude toward technology significantly drives the actual deployment of SME
digitalization among Yemeni businesses [16, 52]. Due to that, when Yemeni entrepreneurs
translate this vision into reality, the result will be positive perceptions, and the attitudes
towards digital tools will directly influence their practical adoption of digitalization in business
operations [53].
Additionally, this attitude is formed by TAM factors such as perceived benefits, ease of use, and
the compatibility of technology with business strategy in Yemeni SMEs [51]. Moreover, the
actual use of technology is a central step in the digitalization of Yemeni SME management. It
illustrates Yemeni entrepreneurs' development from theoretical acceptance to practical
implementation [1]. This development is significant for Yemeni SMEs as it enables them to
influence digital technologies to develop the operational efficiency of digitalization
management [52]. Accordingly, this approach is essential for the development of the Yemeni
digital economy, where technology is not only available but also actively used for SME business
growth and development [50, 51]. Hence, this study posits the following hypothesis:
➢ H3: The attitude toward using technology has a positive influence on the actual system
use.
Figure 1. Conceptual Framework
RESEARCH METHODOLOGY
This study explored the relationship between SME Digitalization and the Technology
Acceptance Model (TAM) [37, 46]. It followed a quantitative approach and employed a survey
method, distributing a questionnaire to gather information on factors influencing actual system
use of technologies among Yemeni entrepreneurs. The questionnaire used a five-point Likert
Page 7 of 17
95
AL-Ghaili, M., Mahomed, A. S. B., & Yusof, R. N. R. (2024). Driving Digital Transformation: The Impact of SME Digitalization on Technology
Acceptance and Usage in Small and Medium Enterprises of Yemen. Advances in Social Sciences Research Journal, 11(11). 89-105.
URL: http://dx.doi.org/10.14738/assrj.1111.17847
scale, representing ‘1’ as 'Strongly Disagree' to ‘5’ as 'Strongly Agree' to collect data on Yemeni
entrepreneurs’ perceptions. Constructs such as SME Digitalization (SD) are based on Franco,
Godinho [46], while perceived usefulness (PU), attitude toward use (AT), and actual system use
(AS) each employ five-item scales adapted from studies like Davis, Bagozzi [37], Kitsios,
Giatsidis [57].
A random sampling technique within the probability method was implemented to draw a
sample for data collection. Given that the target population is Arabic speaking, the researcher
initially developed the questionnaire in English and then translated it into Arabic. Two bilingual
specialists in digital entrepreneurship and SME digitalization reviewed both versions to ensure
clarity, relevance, and accurate back-translation. This approach, which validated that both
language versions conveyed consistent meaning and measured the intended constructs, has
been commonly utilized in other studies [3, 58-61].
To assess the constructs’ validity and reliability, a pilot study was carried out with a sample of
50 Yemeni entrepreneurs, representing the target population. Cronbach’s alpha values for all
variables were above 0.70, confirming reliability. Specifically, Cronbach’s alpha ranged from
0.922 (for Perceived Usefulness) to 0.762 (for Opportunities to exploit the market), both
exceeding the suggested minimum of 0.70 [62-64]. Hence, the variables showed strong internal
consistency, with all items retained.
During the final data collection, 380 responses were collected, surpassing the sample size
requirement and enabling robust Partial Least Squares Structural Equation Modelling (PLS- SEM) analysis. This research employed PLS-SEM method for data analysis due to its
effectiveness with complex, exploratory models and its suitability for small to medium samples
[4, 13, 14, 62, 65-67]. This method is especially useful for models with mediating effects, where
PU and AU serve as serial mediators. The PLS-SEM process involved a two-step analysis:
measurement model evaluation for reliability and validity, followed by structural model
assessment to test the hypotheses.
RESULTS
Common Method Variance
First, in accordance with Kock [68] recommendations, a full-collinearity test was performed to
determine the issue of common method variance in the data. Common method bias in the SEM
can occur as a result of the measurement technique, which may affect the indicators' shared
variance and responses. All of the study's latent variables were utilised as predictors in the
regression analysis, and a random variable was created in SPSS to serve as the dependent
variable in order to get the full collinearity coefficients.
As suggested by Kock [68], Al-Refaei, Abdulsamad [69], all variance inflation factors (VIFs)
were below the threshold value of 5. This is shown in Table 1. This implies that common method
variance has no effect on the model.
Table 1: Full Collinearity Testing.
SD PU ATU ASU
VIF 1.221 1.905 1.772 1.940
Page 8 of 17
96
Advances in Social Sciences Research Journal (ASSRJ) Vol. 11, Issue 11, November-2024
Services for Science and Education – United Kingdom
Measurement Model
The two-step procedure was employed in this study to evaluate the model [65, 66, 70]. In the
first stage, the measurement model was assessed using Hair and Alamer [62] criteria to assess
validity and reliability of the constructs. Factor loadings, Average Variance Extracted (AVE),
and Composite Reliability (CR) were among the important metrics computed. These measures
had the following thresholds: AVE had to be greater than 0.5, CR had to be greater than 0.7, and
loadings had to be at least 0.5. The majority of the loadings, as shown in Table 2, were adequate,
with all CR values over 0.7 and all AVE values above the 0.5 threshold. The validity and
reliability test results for the constructs are also included in Table 2, demonstrating their
robustness.
Henseler, Ringle [71] recommended adopting the Heterotrait-Monotrait Ratio of Correlations
(HTMT) technique to verify discriminant validity. Table 3 shows that all HTMT values were less
than 0.85, which suggests that respondents were able to discriminate between the constructs
under study. Hence, the findings validate the constructs' validity and reliability of the
measurements.
Table 2: Measurement Model.
Constructs Items Indicator Reliability Internal Consistency Convergent Validity
Outer Loadings>0.5 Cronbach Alpha > 0.7 Composite Reliability >0.6 AVE > 0.5
SD 1 0.850 0.928 0.939 0.609
2 0.794
3 0.634
4 0.705
5 0.730
6 0.850
7 0.815
8 0.804
9 0.821
10 0.773
PU 1 0.871 0.924 0.943 0.768
2 0.868
3 0.859
4 0.906
5 0.876
AT 1 0.925 0.931 0.948 0.787
2 0.895
3 0.789
4 0.896
5 0.923
AS 1 0.871 0.904 0.929 0.724
2 0.890
3 0.810
4 0.874
5 0.807
Table 3: HTMT Results.
AS AT PU SD
AS
AT 0.703
PU 0.634 0.506
SD 0.170 0.116 0.351