Predictive Factors Influencing the Adoption of Digital Finance: A Unified Approach Drawing from TOE and NV Theories

Abstract

This article aimed to investigate the factors that may impact the adoption of digital finance within Small and Medium Enterprises (SMEs). Using the Technology-Organization-Environment (TOE) Theory and the Net Valence (NV) Model, the study categorizes predictors into technological, environmental, and organizational factors. Findings highlight the significant effects of perceived benefits and risks, environmental factors, and organizational characteristics, notably human resource quality. The study collected data via a questionnaire survey from 313 Malaysian SMEs engaged in exporting, employing Partial Least Squares Structural Equation Modelling (PLS-SEM) for analysis. The implications of this study extend to policymakers, industry practitioners, and researchers, offering insights for policy formation, acknowledging the main factors that might affect digital finance adoption, assisting in the creation of tailored financial models to boost the companies' performance, providing SMEs with strategic understanding regarding the benefits of embracing digital finance for enhanced competitiveness, and aiding developers of digital finance solutions in addressing adoption barriers, thus tailoring solutions to meet SMEs' specific needs.