Development of small-and medium-sized enterprises through information technology adoption persistence in Vietnam

ABSTRACT Understanding how small- and medium-sized enterprises (SMEs) adopt information technology (IT) in a rapidly changing business environment is important to promote their development. Utilizing longitudinal data of SMEs and the local business environments in a transition economy over a period of 2005–2015 and applying the dynamic random effect probit model as was done in the study “Business environment and innovation persistence: The case of small- and- medium sized enterprises in Vietnam” published in Economics of Innovation and New Technology, this study finds that the persistence of SMEs’ IT adoption is reduced in an improved local business environment. This finding indicates that an improved local business environment is an enabling factor for SMEs without prior experience to begin IT adoption. As a result, policymakers in transition economies are recommended to enhance SMEs’ IT adoption for development by synchronizing IT policies and policies to improve the quality of the local business environment.