Figure 3. Internet adoption model within small enterprises (Source: Jones et al., 2003)
The majority of the used level of adoption variable are categorical i.e., adopter and non adopter. In several
publication, partial adopter and full adopter terms were used. Van Akkeren and Cavaye (1999) classified
small enterprises, in relation to information system adoption and/or application, into three groups: nonadopter;
adopter; and full-adopter. The application on information technology in a firm will start from
individuals. Referring that key individuals in a firm is the owner, intensity of information technology
application by firm’s owners is assumed to have significant effect on intensity of information technology
application within the firm. The existence of this inter-chain effect, following Myers and Kappelman
(1997), will be investigated in this study. The ultimate end of this inter-chain effect is the effect of
information technology application intensity on small firm performance. The process of internet
technology adoption by small enterprise operators was explained by Jones et al. (2003) through Figure 3.
Impacts of internet technology on small enterprises’ performance were investigated by Dulipovici (2002)
in Canada. All independent variables, including internet application, significantly affect all dependent
variables which include (1) improvement in firm performance as to compare with previous year, and (2)
the expected firm performance improvement in the following year. These independent variable include
internet use or application (binary variables), province, industry sector, firm’s age, number of labor, and
business location (urban or village). Bitler (2001) investigated the relationship between information
technology investment and small firms’ performance, using regression model. Results of his study found
that there was a significant performance difference between firms adopting information technology and
those who are non-adopting information technology