E-Banking Technology Characteristics and Performance of Micro and Small Enterprise in Kenya

A Moderated Mediation Model of Adoption and Innovative Behavior

https://doi.org/10.33215/sjom.v4i1.480

Authors

  • Beatrice Kitigin Moi University, Kenya
  • Michael Korir Moi University, Kenya
  • Kefa Chepkwony Moi University, Kenya

Keywords:

E-banking, Adoption, Innovative behavior, Kenya, Small to medium enterprises

Abstract

Purpose- The study investigated the indirect effect of innovative behavior on the relationship between e-banking technology characteristics and micro and small enterprises (MSE) performance through e-banking technology adoption in Kenya.

Design/methodology: The study employed an explanatory research design and a multistage sampling technique to collect cross-sectional data using a self-administered questionnaire. The sample size of 455 MSEs was drawn from a target population of 5915 in Vihiga County, Kenya.

Findings-The study findings showed a complementary mediation of e-banking technology adoption on the relationship between e-banking technology characteristics and MSE performance. Additionally, innovative behavior moderated the association between e-banking technology adoption and MSE performance but did not moderate the relationship between e-banking technology characteristics and e-banking technology adoption. Further, innovative behavior moderates the indirect relationship between e-banking technology characteristics and MSE performance via e-banking technology adoption. This effect was much more substantial, with a higher level of innovative behavior.

Practical Implications- These findings underscored the need for policy reviews for government, county, and private sector on e-banking technology adoption and MSE performance in Kenya.

Originality/value- The study's findings bring vital knowledge concerning the indirect effect of e-banking technology adoption and innovative behavior on the study variables.

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Al-Rahmi, W. M., Yahaya, N., Aldraiweesh, A. A., Alamri, M. M., Aljarboa, N. A., Alturki, U., & Aljeraiwi, A. A. (2019). Integrating the technology acceptance model with innovation diffusion theory: An empirical investigation of students’ intention to use E-learning systems. IEEE Access, 7, 26797-26809.

Alegre, J., & Pasamar, S. (2018). Firm innovativeness and work-life balance. Technology Analysis & Strategic Management, 30(4), 421-433.

Anouze, A. L. M., & Alamro, A. S. (2019). Factors affecting intention to use e-banking in Jordan. International Journal of Bank Marketing.

Arora, S., & Kaur, S. (2018). Perceived Risk Dimensions and its Impact on Intention to Use E-Banking Services: A Conceptual Study. Journal of Commerce and Accounting Research, 7(2), 18.

Bani-Melhem, S., Zeffane, R., & Albaity, M. (2018). Determinants of employees’ innovative behavior. International Journal of Contemporary Hospitality Management.

Cespiva, R. B. (2018). Factors Influencing the Decision to Adopt a Digital Identity: A Correlational Study. Capella University.

Chong, A. Y.-L. (, 2013). Mobile commerce usage activities: The roles of demographic and motivation variables. Technological Forecasting and Social Change, 80(7), 1350-1359.

Cohen, J., Cohen, P., West, S., & Aiken, L. (2003). Applied multiple correlation/regression analysis for the social sciences: Hillsdale, NJ: Erlbaum.

Drucker, P. (2014). Innovation and entrepreneurship: Routledge.

Durodolu, O. O. (2016). Technology acceptance model as a predictor of using information system'to acquire information literacy skills. Library Philosophy and Practice.

Eid, R., & Agag, G. (2020). Determinants of innovative behavior in the hotel industry: a cross-cultural study. International Journal of Hospitality Management, 91, 102642.

Elechi, A., & Rufus, A. (2016). Cashless Policy in Nigeria and its Socio-Economic Impacts. Public Policy and Administration Research,(6), 10, 16-22.

Haseeb, M., Lis, M., Haouas, I., & WW Mihardjo, L. (2019). The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia. Sustainability, 11(17), 4705.

Hayes, A. F. (2017). Introduction to mediation, moderation, and conditional process analysis: A regression-based approach: Guilford publications.

Hughes, M., & Morgan, R. E. (2007). Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial marketing management, 36(5), 651-661.

Hussein, M. I. (2017). A mixed methods approach to investigate the electronic banking websites service quality: The case of Egypt. Cardiff Metropolitan University.

Igudia, P. O. (2017). A Qualitative Evaluation of the Factors Influencing the Adoption of Electronic Payment Systems (SMEs) by SMEs in Nigeria. European Scientific Journal, ESJ, 13, 31.

InterMedia. (2013). Mobile Money in Tanzania: Use.

Iqbal, U., Gan, C., & Nadeem, M. (2020). Economic policy uncertainty and firm performance. Applied Economics Letters, 27(10), 765-770.

Kingshott, R. P., Sharma, P., & Chung, H. F. (2018). The impact of relational versus technological resources on e-loyalty: A comparative study between local, national and foreign branded banks. Industrial marketing management, 72, 48-58.

Liedholm, C. E., & Mead, D. C. (2013). Small enterprises and economic development: the dynamics of micro and small enterprises: Routledge.

Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of management Review, 21(1), 135-172.

MacKinnon, D. (2012). Introduction to statistical mediation analysis: Routledge.

Mafabi, S., Munene, J. C., & Ahiauzu, A. (2015). Creative climate and organisational resilience: the mediating role of innovation. International Journal of Organizational Analysis.

Martín-de Castro, G., Delgado-Verde, M., Navas-López, J. E., & Cruz-González, J. (2013). The moderating role of innovation culture in the relationship between knowledge assets and product innovation. Technological Forecasting and Social Change, 80(2), 351-363.

Marvel, M. R., Wolfe, M. T., & Kuratko, D. F. (2020). Escaping the knowledge corridor: How founder human capital and founder coachability impacts product innovation in new ventures. Journal of Business Venturing, 35(6), 106060.

Masocha, R., & Dzomonda, O. (2018). Adoption of Mobile Money Services and the performance of small and medium enterprises in Zimbabwe. Academy of Accounting and Financial Studies Journal.

Migdadi, M. M., Zaid, M. K. S. A., Al-Hujran, O. S., & Aloudat, A. M. (2016). An empirical assessment of the antecedents of electronic-business implementation and the resulting organizational performance. Internet research.

Mugo, A. N. (2016). Challenges facing Kenyan micro and small enterprises in accessing East African markets: A case of manufacturing MSEs in Nairobi. United States International University-Africa.

Mwaniki, D., Kinyanjui, M., & Opiyo, R. (2017). Towards Smart Economic Development in Nairobi: Evaluating Smart City Economy Impacts and Opportunities and Challenges for Smart Growth Smart Economy in Smart Cities (pp. 749-790): Springer.

Nashold Jr, D. B. (2020). Trust in Consumer Adoption of Artificial Intelligence-Driven Virtual Finance Assistants: A Technology Acceptance Model Perspective. The University of North Carolina at Charlotte.

Nel, H.-A. (2017). Know-Your-Customer measures: mitigating money-laundering risks in mobile banking transactions. North-West University (South Africa), Potchefstroom Campus.

Rawashdeh, A. (2015). Factors affecting adoption of internet banking in Jordan. International Journal of Bank Marketing.

Rogers, E. M. (1995). Diffusion of Innovations: modifications of a model for telecommunications Die diffusion von innovationen in der telekommunikation (pp. 25-38): Springer.

Said, F. H., & Kaplelach, S. (2019). Mobile Banking Innovation and Financial Performance of Selected Commercial Banks in Kenya. Journal of Finance and Accounting, 3(3), 228-254.

Sarooghi, H., Libaers, D., & Burkemper, A. (2015). Examining the relationship between creativity and innovation: A meta-analysis of organizational, cultural, and environmental factors. Journal of Business Venturing, 30(5), 714-731.

Saunders, M., Lewis, P., & Thornhill, A. (2012). Research methods for business students (6. utg.). Harlow: Pearson.

Saunders, M. N., & Lewis, P. (2012). Doing research in business & management: An essential guide to planning your project: Pearson.

Schumpeter, J. A. (1949). Economic history and entrepreneurial history. Essays: Joseph Schumpeter. New Brunswick, NJ: Transaction Publishers.

Sepasgozar, F. M. E., Ramzani, U., Ebrahimzadeh, S., Sargolzae, S., & Sepasgozar, S. (2020). Technology acceptance in e-governance: A case of a finance organization. Journal of Risk and Financial Management, 13(7), 138.

Singhraul, B. P., & Garwal, Y. S. (2018). Cashless Economy Challenges and Opportunities in India. Pacific Business Review International, 10(9), 54-63.

Somekh, B., & Lewin, C. (2011). Theory and methods in social research: Sage.

Urbano, D., Aparicio, S., & Audretsch, D. (2019). Twenty-five years of research on institutions, entrepreneurship, and economic growth: what has been learned? Small Business Economics, 53(1), 21-49.

Wang, Y., & Zhang, X. (2009). Operationalization of corporate entrepreneurship and its performance implications in China. Journal of Chinese Entrepreneurship.

Wu, B., & Chen, X. (2017). Continuance intention to use MOOCs: Integrating the technology acceptance model (TAM) and task technology fit (TTF) model. Computers in Human Behavior, 67, 221-232.

Yamane, T. (1967). Elementary sampling theory.

Yang, Q., Pang, C., Liu, L., Yen, D. C., & Tarn, J. M. (2015). Exploring consumer perceived risk and trust for online payments: An empirical study in China’s younger generation. Computers in Human Behavior, 50, 9-24.

Zhao, X., Lynch Jr, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. Journal of Consumer Research, 37(2), 197-206.

Zikmund, W., Babin, B., Carr, J., & Griffin, M. (2012). Business Research Methods (9th International ed.). South-Western College Publishing.

Al-Rahmi, W. M., Yahaya, N., Aldraiweesh, A. A., Alamri, M. M., Aljarboa, N. A., Alturki, U., & Aljeraiwi, A. A. (2019). Integrating technology acceptance model with innovation diffusion theory: An empirical investigation on students’ intention to use E-learning systems. IEEE Access, 7, 26797-26809.

Alegre, J., & Pasamar, S. (2018). Firm innovativeness and work-life balance. Technology Analysis & Strategic Management, 30(4), 421-433.

Anouze, A. L. M., & Alamro, A. S. (2019). Factors affecting intention to use e-banking in Jordan. International Journal of Bank Marketing.

Arora, S., & Kaur, S. (2018). Perceived Risk Dimensions and its Impact on Intention to Use E-Banking Services: A Conceptual Study. Journal of Commerce and Accounting Research, 7(2), 18.

Bani-Melhem, S., Zeffane, R., & Albaity, M. (2018). Determinants of employees’ innovative behavior. International Journal of Contemporary Hospitality Management.

Cespiva, R. B. (2018). Factors Influencing the Decision to Adopt a Digital Identity: A Correlational Study. Capella University.

Chong, A. Y.-L. (2013). Mobile commerce usage activities: The roles of demographic and motivation variables. Technological Forecasting and Social Change, 80(7), 1350-1359.

Cohen, J., Cohen, P., West, S., & Aiken, L. (2003). Applied multiple correlation/regression analysis for the social sciences: Hillsdale, NJ: Erlbaum.

Drucker, P. (2014). Innovation and entrepreneurship: Routledge.

Durodolu, O. O. (2016). Technology acceptance model as a predictor of using information system'to acquire information literacy skills. Library Philosophy and Practice.

Eid, R., & Agag, G. (2020). Determinants of innovative behaviour in the hotel industry: a cross-cultural study. International Journal of Hospitality Management, 91, 102642.

Elechi, A., & Rufus, A. (2016). Cashless Policy in Nigeria and its Socio-Economic Impacts. Public Policy and Administration Research,(6), 10, 16-22.

Haseeb, M., Lis, M., Haouas, I., & WW Mihardjo, L. (2019). The Mediating Role of Business Strategies between Management Control Systems Package and Firms Stability: Evidence from SMEs in Malaysia. Sustainability, 11(17), 4705.

Hayes, A. F. (2017). Introduction to mediation, moderation, and conditional process analysis: A regression-based approach: Guilford publications.

Hughes, M., & Morgan, R. E. (2007). Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial marketing management, 36(5), 651-661.

Hussein, M. I. (2017). A mixed methods approach to investigate the electronic banking websites service quality: The case of Egypt. Cardiff Metropolitan University.

Igudia, P. O. (2017). A Qualitative Evaluation of the Factors Influencing the Adoption of Electronic Payment Systems (SMEs) by SMEs in Nigeria. European Scientific Journal, ESJ, 13, 31.

InterMedia. (2013). Mobile Money in Tanzania: Use.

Iqbal, U., Gan, C., & Nadeem, M. (2020). Economic policy uncertainty and firm performance. Applied Economics Letters, 27(10), 765-770.

Kingshott, R. P., Sharma, P., & Chung, H. F. (2018). The impact of relational versus technological resources on e-loyalty: A comparative study between local, national and foreign branded banks. Industrial marketing management, 72, 48-58.

Liedholm, C. E., & Mead, D. C. (2013). Small enterprises and economic development: the dynamics of micro and small enterprises: Routledge.

Lumpkin, G. T., & Dess, G. G. (1996). Clarifying the entrepreneurial orientation construct and linking it to performance. Academy of management Review, 21(1), 135-172.

MacKinnon, D. (2012). Introduction to statistical mediation analysis: Routledge.

Mafabi, S., Munene, J. C., & Ahiauzu, A. (2015). Creative climate and organisational resilience: the mediating role of innovation. International Journal of Organizational Analysis.

Martín-de Castro, G., Delgado-Verde, M., Navas-López, J. E., & Cruz-González, J. (2013). The moderating role of innovation culture in the relationship between knowledge assets and product innovation. Technological Forecasting and Social Change, 80(2), 351-363.

Marvel, M. R., Wolfe, M. T., & Kuratko, D. F. (2020). Escaping the knowledge corridor: How founder human capital and founder coachability impacts product innovation in new ventures. Journal of Business Venturing, 35(6), 106060.

Masocha, R., & Dzomonda, O. (2018). Adoption of Mobile Money Services and the performance of small and medium enterprises in Zimbabwe. Academy of Accounting and Financial Studies Journal.

Migdadi, M. M., Zaid, M. K. S. A., Al-Hujran, O. S., & Aloudat, A. M. (2016). An empirical assessment of the antecedents of electronic-business implementation and the resulting organizational performance. Internet research.

Mugo, A. N. (2016). Challenges facing Kenyan micro and small enterprises in accessing East African markets: A case of manufacturing MSEs in Nairobi. United States International University-Africa.

Mwaniki, D., Kinyanjui, M., & Opiyo, R. (2017). Towards Smart Economic Development in Nairobi: Evaluating Smart City Economy Impacts and Opportunities and Challenges for Smart Growth Smart Economy in Smart Cities (pp. 749-790): Springer.

Nashold Jr, D. B. (2020). Trust in Consumer Adoption of Artificial Intelligence-Driven Virtual Finance Assistants: A Technology Acceptance Model Perspective. The University of North Carolina at Charlotte.

Nel, H.-A. (2017). Know-Your-Customer measures: mitigating money-laundering risks in mobile banking transactions. North-West University (South Africa), Potchefstroom Campus.

Rawashdeh, A. (2015). Factors affecting adoption of internet banking in Jordan. International Journal of Bank Marketing.

Rogers, E. M. (1995). Diffusion of Innovations: modifications of a model for telecommunications Die diffusion von innovationen in der telekommunikation (pp. 25-38): Springer.

Said, F. H., & Kaplelach, S. (2019). Mobile Banking Innovation and Financial Performance of Selected Commercial Banks in Kenya. Journal of Finance and Accounting, 3(3), 228-254.

Sarooghi, H., Libaers, D., & Burkemper, A. (2015). Examining the relationship between creativity and innovation: A meta-analysis of organizational, cultural, and environmental factors. Journal of Business Venturing, 30(5), 714-731.

Saunders, M., Lewis, P., & Thornhill, A. (2012). Research methods for business students (6. utg.). Harlow: Pearson.

Saunders, M. N., & Lewis, P. (2012). Doing research in business & management: An essential guide to planning your project: Pearson.

Schumpeter, J. A. (1949). Economic history and entrepreneurial history. Essays: Joseph Schumpeter. New Brunswick, NJ: Transaction Publishers.

Sepasgozar, F. M. E., Ramzani, U., Ebrahimzadeh, S., Sargolzae, S., & Sepasgozar, S. (2020). Technology acceptance in e-governance: A case of a finance organization. Journal of Risk and Financial Management, 13(7), 138.

Singhraul, B. P., & Garwal, Y. S. (2018). Cashless Economy Challenges and Opportunities in India. Pacific Business Review International, 10(9), 54-63.

Somekh, B., & Lewin, C. (2011). Theory and methods in social research: Sage.

Urbano, D., Aparicio, S., & Audretsch, D. (2019). Twenty-five years of research on institutions, entrepreneurship, and economic growth: what has been learned? Small Business Economics, 53(1), 21-49.

Wang, Y., & Zhang, X. (2009). Operationalization of corporate entrepreneurship and its performance implications in China. Journal of Chinese Entrepreneurship.

Wu, B., & Chen, X. (2017). Continuance intention to use MOOCs: Integrating the technology acceptance model (TAM) and task technology fit (TTF) model. Computers in Human Behavior, 67, 221-232.

Yamane, T. (1967). Elementary sampling theory.

Yang, Q., Pang, C., Liu, L., Yen, D. C., & Tarn, J. M. (2015). Exploring consumer perceived risk and trust for online payments: An empirical study in China’s younger generation. Computers in Human Behavior, 50, 9-24.

Zhao, X., Lynch Jr, J. G., & Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. Journal of Consumer Research, 37(2), 197-206.

Zikmund, W., Babin, B., Carr, J., & Griffin, M. (2012). Business Research Methods (9th International ed.). South-Western College Publishing.

Published

2021-01-02

How to Cite

Kitigin, B., Korir, M., & Chepkwony, K. (2021). E-Banking Technology Characteristics and Performance of Micro and Small Enterprise in Kenya: A Moderated Mediation Model of Adoption and Innovative Behavior. SEISENSE Journal of Management, 4(1), 13–30. https://doi.org/10.33215/sjom.v4i1.480