Size matters: the impact of combinations of ICT assets on the performance of Chilean micro, small and medium enterprises

ABSTRACT

This paper studies the effects that different combinations of ICT have on the performance indicators of microenterprises and SMEs (MSMEs) of a developing economy. We focus on two questions: First, whether the impact of ICT differs according to different ICT assets used in companies? Second, whether the effects of these combined ICT change according to the company size, especially for MSME in emerging countries? Based on RBV and TOE, we posit that different combinations of ICT have different effects on performance indicators of MSMEs. To test this hypothesis, we used a survey of 5519 Chilean companies. Three major conclusions can be drawn from our results. Firstly, ICT combination in the MSMEs follows a four-stage maturity model. Secondly, each stage has positive effects on MSMEs’ revenues and profits. Thirdly, the organization’s size moderates the impact of ICT on productivity: the smaller the company, the more significant the benefits of ICT assets.

KEYWORDS:

• Firm performance
• IT business value
• IT assets
• small and medium business
• MSMEs in developing countries

SUBJECT CLASSIFICATION CODES:

• Small and Medium Enterprise (SME) access to public procurement systems
• adoption and diffusion of IT
• and rate of uptake

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Alejandro Cataldo holds a PhD and MEng of the Catholic University of Chile at Santiago. Alejandro is also an assistant professor at the University of Talca since 2014 and Director of Postgraduate Studies at Economy and Business Faculty. He has been invited as a professor for international universities such as Universidad Nacional of Colombia, Catholic University of Santa Maria, Peru. Also, he has been a lecturer of school at the University of Rovira, Spain, visitor at Management Systems Department at the University of Waikato and visiting scholar at Babson College, USA. He has an engineering degree in Industrial Engineering and also worked in private companies for several years. His research interests include small business management, information technology, and engineering education.

Gabriel Pino holds a PhD in Economics at Southern Illinois University, USA. Gabriel is an assistant professor at the University of Talca since 2014. His research interests include regional and development economics. Gabriel has participated in international research groups and has different publications in high ranked journals.

Robert McQueen is Canadian by birth (Toronto area), and a New Zealander by choice. He completed a BApSc in Electrical Engineering from the University of Waterloo in 1969, an MBA from the Harvard Business School in 1974, and a PhD (Computer Science) from the University of Waikato in 1992. He was as the Professor of Electronic Commerce Technologies in the Department of Management Systems, the University of Waikato in Hamilton, New Zealand, and has been living in New Zealand since 1988. Currently, Professor McQueen is retired.

ORCID

Alejandro Cataldo http://orcid.org/0000-0002-8183-591X

Robert J. McQueen http://orcid.org/0000-0003-1006-3411

Notes

1 For this study, we used Aral and Weill’s (2007) definition of ICT assets: ICT assets are investments of different types of ICT. Furthermore, we assumed that standardized software applications are a kind of ICT asset (Picolli & Pigni, 2016).

2 The fact that the data used is based on a survey published in 2011 imposes a limitation to this study. This will be discussed in the conclusions.

Additional information

Funding

This research has been supported by CONICYT – FONDECYTINICIACION through [grant number 11160067]. Gabriel Pino thanks the Dirección de Investigación at the Universidad de Talca for its support [Proyecto de Investigación Inicial RU 503/2015].