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An empirical investigation of the effects of firm characteristics on the propensity to adopt cloud computing

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Abstract

Cloud computing (CC) is emerging as a new paradigm of resource acquisition and management of information and communication technologies (ICT) by firms, which can offer significant benefits, but at the same time can pose significant risks as well, so its adoption by firms has been lower than the initial expectations. Therefore, it is quite important to gain a better understanding of the factors affecting positively or negatively the adoption of CC. This paper presents an empirical investigation of the effects on a firm’s propensity to adopt CC of a set of firm characteristics referring to technological infrastructure, strategy, personnel skills, size and competition. Its conceptual foundation is the Technology, Organization and Environment theory of technological innovation adoption. Our study is based on data from 676 European manufacturing firms from the glass, ceramics and cement sectors, which have been collected through the e-Business Survey of the European Commission. The results indicate that in the above sectors ICT infrastructure sophistication has the strongest positive effect on CC adoption propensity among all examined firm characteristics. Furthermore, we have found that the existence of an ICT investment reduction strategy, the employment of specialized ICT personnel and the existence of previous experience of ICT outsourcing also have positive effects on a firm’s propensity to adopt CC. On the contrary, employees ICT skills, price and quality competition do not affect CC adoption propensity. Finally, our results also indicate that in the three examined sectors firm size has no significant influence on the propensity to adopt CC.

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Notes

  1. The glass, ceramics and cement sectors are long-established and mature manufacturing sectors in the European Union (EU), in which EU has a trade surplus in international trade. These sectors are important suppliers of the construction sector. Further, they provide inputs to aerospace, automobile and electronics sectors and produce themselves household consumer goods (Empirica GmbH 2009).

  2. The TOE approach has been used as theoretical background also in part of earlier empirical literature on firm level adoption of various ICT, which we do not pursue further here; see, e.g., Hong and Zhu (2006), Pan and Jang (2008), Chong and Ooi (2008), Oliveira and Martins (2010), Thiesse et al. (2011), also see review by Baker (2011).

  3. As there is high level of correlation between them and in order to avoid multi-collinearity problems (Greene 2011; Sreejesh et al. 2014) we did not include both of them in the same model, but we estimated the above model separately for product and for process innovation.

  4. It is also almost impossible to find valid instruments for endogeneity tests (see, e.g., Rivers and Vuong 1988) in our cross-section data.

  5. We estimated also these two versions of our model using instead of the ICT infrastructure sophistication independent variable each of its component variables (use of ERP, CRM, SCM, SRM systems), and found positive statistically significant effects of all four on CC adoption propensity.

  6. For this reason we do not need to estimate marginal effects.

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Authors and Affiliations

  1. Department of Information and Communication Systems Engineering, University of the Aegean, Gorgyras and Palama 2, 83200, Karlovassi, Samos, Greece

    Euripidis Loukis & Niki Kyriakou

  2. ETH Zurich, KOF Swiss Economic Institute, Leonhardstrasse 21, LEE F111, 8092, Zurich, Switzerland

    Spyros Arvanitis

Authors
  1. Euripidis Loukis
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  2. Spyros Arvanitis
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  3. Niki Kyriakou
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Corresponding author

Correspondence to Euripidis Loukis.

Appendix 1

Appendix 1

See Table 6.

Table 6 E-business survey questions used
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Loukis, E., Arvanitis, S. & Kyriakou, N. An empirical investigation of the effects of firm characteristics on the propensity to adopt cloud computing. Inf Syst E-Bus Manage 15, 963–988 (2017). https://doi.org/10.1007/s10257-017-0338-y

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