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JSIT
24,3 Determinants of Facebook
adoption and its impact on
service-based small and medium
246 enterprise performance in
Received 18 November 2020
Revised 31 August 2021
northwestern Nigeria
11 March 2022
Accepted 15 June 2022 Idris Na’umma Abdullahi
School of Computer Sciences, Universiti Sains Malaysia, Penang, Malaysia and
Department of Computer Sciences, Federal College of Education Kano,
Kano, Nigeria, and
Mohd Heikal Husin, Ahmad Suhaimi Baharudin and
Nor Athiyah Abdullah
School of Computer Sciences, Universiti Sains Malaysia, Penang, Malaysia

Abstract
Purpose – This study aims to examine the determinants of Facebook adoption and its impact on the
performance of service-based small and medium enterprises (SMEs) in northwestern Nigeria. The mediating
effect of Facebook adoption between the determinants of Facebook adoption and the performance of the SMEs
was examined.
Design/methodology/approach – A comprehensive framework was built using the technology –
organisation–environment framework integrated with the resource-based view theory. Data were collected
from 165 SME decision-makers using an online survey. The hypothesised relationships were tested using
partial least squares structural equation modelling.
Findings – Facebook adoption exerted a positive impact on the financial and non-financial performance of
the SMEs. The important determinants of Facebook adoption were relative advantage, perceived risks, top
management support, organisational readiness and government support. The mediating effect of Facebook
adoption between these determinants and financial and non-financial performance was confirmed.
Research limitations/implications – The findings contribute to better insight into the determinants of
Facebook adoption and its impact on the financial and non-financial performance of SMEs. The findings can inspire
and guide SMEs on adopting Facebook as a marketing strategy to improve performance and reduce failure rates.
Originality/value – The findings confirm the potential of adopting Facebook for enhancing the
performance of SMEs. This is arguably among the first empirical studies to test the mediating effect of
Facebook adoption.
Keywords Determinants, Facebook adoption, Service-based SMEs, Performance,
Developing countries, Services SMEs
Paper type Research paper

Journal of Systems and

Information Technology
1. Introduction
Vol. 24 No. 3, 2022
pp. 246-267
Small and medium enterprises (SMEs) form the economic foundation of many developed
© Emerald Publishing Limited
1328-7265
and developing countries (Cant and Wiid, 2016). Moreover, SMEs help to reduce
DOI 10.1108/JSIT-11-2020-0249 unemployment and poverty levels and enhance the economic development of many
countries (Kalkan and Çetinkaya Bozkurt, 2017). SMEDAN, the Nigeria’s Small and Medium Determinants
Enterprises Development Agency, defines small enterprises as firms with 10–49 employees of Facebook
and a capital base of ₦5m to less than ₦50m (US$12,132 to less than US$121,318). Medium
enterprises are firms that employ 50–199 people and feature a capital base of ₦50m to
adoption
₦500m (US$121,318 to less than US$1,213,180) (SMEDAN, 2013).
Service-based SMEs provide services, otherwise termed intangible products (Potnis and
Deosthali, 2014). More than 70% of Nigerian SMEs are service-based (SMEDAN, 2013).
Nevertheless, the performance of Nigerian service-based SMEs is low (Abdullahi et al., 247
2016), which has been primarily attributed to marketing challenges precipitated by
technological development (Adegbuyi et al., 2015). Typically, Nigerian SMEs use traditional
media such as radio and television as marketing techniques (Ihesiene and Akpojaro, 2015).
Nonetheless, customers currently focus more attention on social media. Rashid et al. (2020,
p. 17) defined social media as “an advancement of traditional media, that employs a more
complex set of tools, technologies, and techniques for connection, relationship building, and
social interaction”.
In developed nations and many developing nations, SMEs that have adopted Facebook
as a marketing technology are enjoying competitive advantages and enhanced performance
(Ainin et al., 2015). Likewise, Nigerian service-based SMEs should adopt Facebook to
communicate with business stakeholders cooperatively and participatorily to achieve
business objectives (Sutomo et al., 2020). SMEs should adopt popular social media in their
target market (Ali Qalati et al., 2021). With 31,860,000 users, Facebook is the most widely
used social medium among Nigerians (Stats, 2020). The ability of Nigerian SMEs to adopt
new technology is limited by financial constraints and the lack of technical expertise
(Radulovich et al., 2018). Nevertheless, Facebook is cost-effective and does not require much
technical expertise before its adoption (Alalwan et al., 2017). Thus, adopting Facebook is an
appropriate option for Nigerian service-based SMEs.
Despite the popularity of Facebook among Nigerians and its potential for enhancing their
performance, Nigerian SMEs are hesitant to adopt Facebook as they lack awareness of the
benefits (Omotosho, 2020). Additionally, although many have reported positive
relationships between adopting Facebook and the performance of a business (Oyewobi et al.,
2021; Ladokun, 2019; Akuz et al., 2020) have asserted that Facebook demonstrated an
insignificant impact on the performance of SMEs in Nasarawa State, Nigeria. Hence, a more
comprehensive investigation is required.
Most existing studies have focused on developed economies (Ali Qalati et al., 2021). The
few existing studies in the Nigerian context have only explored the direct impact of adopting
social media on either financial performance (Ibekwe et al., 2019) or non-financial
performance (Oyewobi et al., 2021; Ladokun, 2019). Nonetheless, the actual impact of
adopting social media on both financial and non-financial performance should be assessed
(Khalique et al., 2018). Olanrewaju et al. (2020) recommended investigating the mediating
effect of social media between technology–organisation–environment (TOE) factors and the
performance of SMEs.
With the aim of bridging the above gaps, the TOE framework was integrated with the
resource-based view (RBV) theory to:

evaluate how Facebook adoption is impacted by technological (relative advantage
and perceived risk), organisational (top management support and organisational
readiness) and environmental (competitive pressure and government support)
factors;

investigate the direct effect of adopting Facebook on the financial and non-financial
performance of service-based SMEs in northwestern Nigeria; and
JSIT
assess the mediating effect of adopting Facebook between the TOE factors and the
24,3 financial and non-financial performance of SMEs.

In this paper, the literature on Facebook was reviewed for marketing and customer
relationship management articles. Subsequently, the existing empirical literature was
reviewed to support the integrative theoretical framework and hypothesised relationships.
Following this, the adopted research methodology was clarified, the results were presented
248 and the findings and theoretical and practical implications were discussed. Lastly, the
limitations were presented, followed by suggestions for future research directions and the
presentation of the conclusion.
The results are expected to advance theoretical knowledge of Facebook adoption by
service-based SMEs in developing countries and yield practical insight on how Facebook
adoption by such SMEs to improve their performance can be stimulated.

2. Literature review
2.1 Facebook for marketing and customer relationship management
Adopting Facebook provides SMEs with a modern means of improving their marketing
capabilities. Facebook enables real-time and interactive communication between SMEs and
customers (Ali Qalati et al., 2021). SMEs that adopted Facebook built strong and sustainable
connections with their customers (Oni, 2021) and were able to promote their business
to customers irrespective of time and geographic location (Odoom et al., 2017). Buwule (2019)
has stated that adopting Facebook enables SMEs to collect customer feedback on their
products or services and use the information to improve to meet customers’ needs (Odoom
et al., 2017). Tajudeen et al. (2018) have asserted that adopting Facebook increases customer
satisfaction and loyalty.
Eze et al. (2021) acknowledged that adopting Facebook empowers customers to
participate in product decisions, share the marketing messages of SMEs and spread positive
word-of-mouth electronically, driving purchase decisions and new customers to the SMEs.
Adopting Facebook also enables SMEs to use their limited resources to enhance their
marketing capabilities and gain numerous benefits, such as increasing sales, reducing
marketing costs, increasing profits and ultimately improving business performance (Ali
Qalati et al., 2021). Other investigators have stated that adopting Facebook helps SMEs
enhance their corporate image, reputation, trustworthiness and credibility (Kalkan and
Çetinkaya Bozkurt, 2017). Furthermore, adopting Facebook enables SMEs to improve
efficiency and build brand awareness and visibility (Parveen et al., 2015). Moreover, it
confers a competitive advantage (Alshamaila, 2018).

2.2 Conceptual framework

A theoretical foundation was developed for the investigation by combining the TOE
framework with the RBV theory. The research conceptual framework and hypotheses are
depicted in Figure 1. The determinants of Facebook adoption were relative advantage,
perceived risk, top management support, organisational readiness, competitive pressure and
government support. Facebook adoption was used as a predictor of financial and non-
financial performance and as a mediator between the proposed determinants and the two
outcome constructs (financial and non-financial performance).

2.3 Theoretical foundation

The conceptual framework was developed by integrating the TOE framework (Tornatzky
et al., 1990) and the RBV theory (Barney, 1991). The TOE framework is a comprehensive
 TECHNOLOGICAL FACTORS H1b–H6b Mediang hypotheses
Determinants
of Facebook
Relative advantage
H1a adoption
Perceived risks

ORGANIZATIONAL FACTORS
H2a Financial
performance 249
Top management
support H7
H3a
Facebook
Organizational adoption
readiness H4a H8 Non-financial
H5a performance
ENVIRONMENTAL FACTORS

Competitive pressure Figure 1.

Conceptual
H6a
framework of the
Government support
H1c–H6c Mediang hypotheses study

framework that considers all characteristics that influence an organization’s adoption of

new technology (Abubakar et al., 2017). The framework demonstrates that the adoption of
organizational technology relies on technological, organisational and environmental factors.
Numerous researchers have considered the TOE framework the most appropriate for
examining organisational adoption of technology (Shim et al., 2018). Oyewobi et al. (2021)
used the TOE framework successfully to investigate social media adoption by Nigerian
construction firms.
Eze et al. (2019) considered the TOE framework appropriate for examining mobile
marketing device adoption by the Nigerian service sector. Awa et al. (2016) used the TOE
framework to investigate the adoption of enterprise resource planning by Nigerian SMEs.
Hence, the determinants of Facebook adoption by Nigerian service-based SMEs were
investigated in this study using the TOE framework. Nevertheless, the framework can
only aid the identification of Facebook adoption determinants but cannot explain the
impact of adopting Facebook on the performance of SMEs. Hence, Facebook adoption
was linked to the financial and non-financial performance of SMEs by integrating the
RBV theory.
The RBV theory states that firms attain continued competitive advantage and better
performance by applying strategies that maximise the use of their internal capabilities and
resources that are valuable, rare, inimitable and distinctive to respond to environmental
opportunities (Barney, 1991). This study argues that strategically adopting Facebook will
enable Nigerian service-based SMEs to establish strong relationships with customers,
achieve marketing objectives and improve performance. Nonetheless, Facebook is a
resource easily imitated by competitors, and mere adoption may not confer a sustained
competitive advantage. Effective and strategic Facebook adoption will enhance exceptional
and inimitable SME capabilities, such as that for customer relationship management,
innovation, knowledge management and sense-and-respond. These capabilities feature such
characteristics as each organisation develops them based on its strategy, effectiveness and
dedication to Facebook adoption. Thus, such capabilities enable sustained competitive
advantage and improved performance (Trainor et al., 2014).
JSIT The effect of social media on the performance of Nigerian construction firms that
24,3 successfully integrated the TOE framework with the RBV theory has been investigated
(Oyewobi et al., 2021). The framework and the theory have also been combined in a study on
the effect of accounting information systems on SME operational performance in Lagos
State, Nigeria (Ologhodo et al., 2020). Therefore, the same approach was used in this study to
yield a theoretical foundation.
250
3. Hypotheses development
This section presents a brief justification for the proposed relationships for the TOE–RBV
integrative conceptual model.

3.1 Technological context

3.1.1 Relative advantage. Relative advantage refers to the tangible and intangible benefits
expected from adopting innovation (Tajudeen et al., 2018). SMEs can improve customer
relationships, service efficiency, competitive advantage, market share and sales and profits
via Facebook. SME owners who realise that Facebook may help them attain these
marketing objectives are likelier to adopt it. Empirical studies in the Nigerian context have
reported that relative advantage has a positive impact on Facebook adoption among SMEs.
For example, Abubakar et al. (2017) reported that relative advantage was an important
determinant of social media adoption among women-owned northwestern Nigerian SMEs.
Oni (2021) determined that relative advantage was crucial for social media adoption among
Nigerian SMEs. Nevertheless, Oyewobi et al. (2021) reported a non-significant effect of
relative advantage in social media adoption by Nigerian construction firms. Predictably, the
relative advantage of Facebook will motivate its adoption by Nigerian service-based SMEs.
Thus, we hypothesised as follows:

H1a. Relative advantage has a positive effect on Facebook adoption.

3.1.2 Perceived risk. Perceived risk indicates the degree to which Nigerian service-based
SMEs consider Facebook unsafe for sharing business information and conducting online
transactions. Adopting Facebook enables SMEs to implement marketing activities in an
online environment without physical contact. Nonetheless, SME operators might be
sceptical about sharing corporate information online (Chang et al., 2016) and believe that
Facebook provides insufficient security and privacy against online fraud. They might also
fear that it might expose them to negative electronic word-of-mouth (Alshamaila, 2018).
Perceived risk has been reported as a negative determinant of social media adoption by
Nigerian SMEs. Afolabi et al. (2018) examined the adoption of social media marketing
among southwestern Nigerian SMEs and reported that perceived risk was a barrier to
Facebook adoption. Similarly, the qualitative investigation by Eze et al. (2019) on mobile
marketing technology adoption by the Nigerian service sector identified perceived risk as an
obstacle to adoption. Nigerian SMEs were also deterred from adopting e-commerce by
perceived risk (Faloye, 2014). When SMEs perceive Facebook as an unsecured platform, the
likelihood of its adoption decreases. Hence, the following hypothesis is proposed:

H2a. Perceived risk has a negative effect on Facebook adoption.

3.2 Organisational context

3.2.1 Top management support. Top management support refers to top executives’ support
and commitment levels to adopting an innovation (Alsaad et al., 2017). Here, top
management support was conceptualised as the extent of support and commitment by the Determinants
top executives of Nigerian service-based SMEs to adopting Facebook. In Nigeria, owners of Facebook
comprise the SME top management and decision-makers. The top management possesses
the authority to allocate resources and can motivate effective Facebook adoption in their
adoption
enterprise (Eze et al., 2021). The existing literature has revealed that top management
support is a major predictor of social media adoption, significantly affecting adoption by
Nigerian construction businesses (Oyewobi et al., 2021). Adegbuyi et al. (2015) have reported
the positive connection between support from top management and SME social media 251
adoption in Ota Metropolis, Nigeria. Agwu (2018) believed that Nigerian SMEs cannot adopt
any technological innovation without top management support. It is expected that when
Nigerian service-based SME top management becomes committed and dedicated to
adopting Facebook, the likelihood of adoption would increase. Therefore, it was
hypothesised that:

H3a. Top management support has a positive effect on Facebook adoption.

3.2.2 Organisational readiness. Organisational readiness was defined by Yang et al. (2015)
as managers’ evaluation of the capability of their organisations to embrace an innovation
based on financial, technical and infrastructural resources. Here, organisational readiness
was conceptualised as the owners’ evaluation of the capabilities of their service-based SMEs
to adopt Facebook based on those resources. Facebook is a low-cost technology and does not
require advanced technical skill for its adoption (Alalwan et al., 2017). Gwadabe (2017)
reported that organisational readiness was a critical factor of Web 2.0 marketing adoption
among northwestern Nigerian SMEs. A qualitative investigation by Okundaye et al. (2019)
reported that financial constraints and lack of technical skill were obstacles to the adoption
of information and communications technology (ICT) among SMEs in Lagos State, Nigeria.
Apulu et al. (2011) reported that Nigerian SMEs generally encounter financial constraints
and lack technical skills, which constrain their ability to embrace technologies. Hence, the
effect of organisational readiness on Facebook adoption was tested in this study via the
following hypothesis:

H4a. Organisational readiness has a positive effect on Facebook adoption.

3.3 Environmental context

3.3.1 Competitive pressure. In this study, competitive pressure was conceptualised as the
intensity of competition perceived by Nigerian service-based SMEs from their market
environment (Gutierrez et al., 2015). Facebook is adopted by SMEs to maximise market
share, increase profits and gain a competitive advantage (Ainin et al., 2015). Empirical
studies have suggested a positive association between competitive pressure and
organisational adoption of social media. The positive effect of competitive pressure was
confirmed by the exploration of Oyewobi et al. (2021) of social media adoption by Nigerian
construction firms. The qualitative study by Eze et al. (2021) identified competitive pressure
as a critical determinant of Nigerian SME adoption of social media. SMEs would be more
likely to adopt Facebook when they realise that Facebook has the potential to strengthen
their competitive advantage and enhance performance. Hence, it was hypothesised that:

H5a. Competitive pressure has a positive effect on Facebook adoption.

3.3.2 Government support. Government support refers to the governmental financial and
non-financial support programmes aimed at relieving the resource constraints on
JSIT enterprises for enhancing their development (Kim et al., 2017). Here, government support
24,3 programmes include training assistance for SME owners, tax subsidies for SMEs that adopt
Facebook, a reliable power supply and a data subscription subsidy. Government support
has been identified as having an enhancing effect on SME adoption of social media. Ogbo
et al. (2019) reported that government support was critical for promoting Facebook adoption
among Nigerian SMEs. Moreover, Oni (2021) recently confirmed the positive influence of
252 government support on Nigerian SME social media adoption. It is anticipated that active
government support can increase the probability of Facebook adoption by Nigerian service-
based SMEs. Therefore, it is expected that:

H6a. Government support has a positive effect on Facebook adoption.

3.4 Facebook adoption and the financial performance of small and medium enterprises
Financial performance indicates the level of monetary achievement of organisational
objectives (Khalique et al., 2018). Facebook adoption has been operationalised based on the
system-centred approach (Burton-Jones and Gallivan, 2007). Hence, the measures for
Facebook adoption are based on the tasks for which SMEs use Facebook. There are many
reasons SMEs adopt Facebook, including attracting customers, advertising products and
services, building customer relationships, creating brand awareness and receiving customer
feedback (Odoom et al., 2017). Although Akuz et al. (2020) have reported that social media
did not affect the performance of SMEs, numerous empirical studies in Nigeria have verified
the positive role of adopting Facebook on the financial performance of SMEs. Specifically,
Gwadabe (2017) determined a positive impact of social media adoption on the sales and
profits of northwestern Nigerian SMEs.
Ibekwe et al. (2019) documented the positive influence of adopting Facebook on
increasing the profits of Nigerian telecommunication firms and reducing their marketing
costs. Adopting Facebook impacted the performance of Nigerian automobile dealers
positively via increased sales and profits and a larger market share (Nwokah and Aeenee,
2017). When SMEs become committed to Facebook adoption through regular Facebook
page updates, timely response to customer inquiries and comments and identifying and
responding to customer needs, it is probable that the SMEs will generate consistent sales
and profit growth and reduce marketing costs. Therefore, it was hypothesised that:

H7. Facebook adoption has a positive effect on financial performance.

3.5 Facebook adoption and the non-financial performance of small and medium enterprises
Non-financial performance is an indicator of the non-monetary performance of an
organisation (Khalique et al., 2018). Franco et al. (2016) have stated that the impact of
organisational social media adoption on both financial and non-financial performance
should be evaluated. Oyewobi et al. (2021) have reported that adopting Facebook exerted a
positive influence on the performance of Nigerian construction firms in terms of customer
relationship management and improved information accessibility. Moreover, Morah and
Omojola (2018) have confirmed that adopting Facebook enhanced customer relationship
management, market accessibility and reduced marketing costs for Nigerian SMEs in the
cities of Lagos and Onisha. In Oyo State, Nigeria, Facebook enabled SMEs to build brand
awareness, augment organisational reputation and improve service feedback (Ladokun,
2019). SMEs that use Facebook effectively to form a strong customer relationship and
identify and respond to customer needs are likely to enhance service efficiency, customer
satisfaction and loyalty, organisational reputation and market share. Hence, it is proposed Determinants
that: of Facebook
H8. Facebook adoption has a positive effect on non-financial performance. adoption

3.6 The mediating effect of Facebook adoption between technology–organisation–

environment factors and small and medium enterprise performance
253
Facebook adoption mediates the relationships between TOE factors and the performance of
SMEs when TOE factor alteration results in an adjustment in Facebook adoption,
subsequently triggering a change in the performance of SMEs (Hair et al., 2019). As
Facebook adoption determinants, TOE factors can enhance the performance of SMEs by
aiding their identification of the critical factor of effective Facebook adoption (Ahani et al.,
2017).
Investigation of the mediating role of Facebook adoption between TOE factors and the
performance of SMEs has been recommended (Olanrewaju et al., 2020). Ali Qalati et al.
(2021) reported that social media adoption mediated TOE factors (relative advantage, top
management support and competitive pressure) and the performance of Pakistani SMEs.
Hence, it is argued that apart from the direct impact on the performance of SMEs, Facebook
adoption also mediates the TOE factors of this study and the financial and non-financial
performance of SMEs. Thus, the mediating effect of Facebook adoption was assessed based
on the hypotheses that Facebook adoption mediates the relationship between:

H1b. Relative advantage and financial performance;

H2b. Perceived risk and financial performance;
H3b. Top management support and financial performance;
H4b. Organisational readiness and financial performance;
H5b. Competitive pressure and financial performance;
H6b. Government support and financial performance;
H1c. Relative advantage and non-financial performance;
H2c. Perceived risk and non-financial performance;
H3c. Top management support and non-financial performance;
H4c. Organisational readiness and non-financial performance;
H5c. Competitive pressure and non-financial performance; and
H6c. Government support and non-financial performance.

4. Research methodology
4.1 Population and sampling technique
The study population consisted of all service-based SMEs in northwestern Nigeria. As there
was no sampling frame, respondent selection was guided by combining convenient and
purposive sampling techniques (Sekaran and Bougie, 2016). Specifically, data were collected
from the decision-makers of service-based SMEs, namely, the SMEs owners or chief
JSIT executive officers (CEOs), marketing managers and information technology (IT) managers,
24,3 as they possess the authority to decide on Facebook adoption by their SME.

4.2 Variables and measures

As a procedural approach for curtailing common method bias, the predictor variables were
measured using a seven-point Likert scale. The mediator and outcome variables were
254 measured using a five-point Likert scale (Podsakoff, 2003). The constructs were measured as
follows: relative advantage (seven items), adapted from Tajudeen et al. (2018); perceived risk
(three items) (Chang et al., 2016); top management support (four items) (Maduku et al., 2016);
organisational readiness (five items) (Puklavec et al., 2018); competitive pressure (three
items) (Gutierrez et al., 2015); government support (three items) (Kim et al., 2017); Facebook
adoption (six items) (Odoom et al., 2017); financial performance (five items) (Khalique et al.,
2018); and non-financial performance (five items) (Khalique et al., 2018).

4.3 Data collection and analysis

This cross-sectional study featured data collection from April 2020 to June 2020 and using a
quantitative research technique. Primary data were collected from decision-makers in
northwestern Nigerian service-based SMEs using an online survey. The survey was
pretested with eight academic experts and 12 SME decision-makers before it was
distributed. Based on the pre-testing recommendations, ambiguous guidelines and
questions were amended to ensure the clarity of the survey. The survey link distribution and
the return of the completed questionnaire spanned approximately 13 weeks from April 2020
to June 2020. In total, 600 questionnaire links were distributed through email. In total, 165
responses were received and considered valid, yielding a response rate of 27.50%. G*Power
computation determined that the minimum sample size for this study was 160 at a 0.05 level
of significance, 95% statistical power and 0.15 effect size (Hair et al., 2017). Hence, this study
collected and analysed an adequate number of responses. Demographic data were analysed
using SPSS 25, while partial least squares structural equation modelling (PLS-SEM) with
SmartPLS 3.2.8 was used for assessing the hypothesised relationships.

4.4 Common method variance

The research data were collected from the same respondents. Thus, the requirement was
that the impact of common method bias should be assessed. In this study, common method
bias was minimised via procedural and statistical strategies. The respondents were
guaranteed confidentiality and the anonymity of their responses in the procedural strategy
(Podsakoff et al., 2012). The statistical strategy used Harman’s single-factor analysis, and no
single factor accounted for most of the variance. Hence, according to Podsakoff (2003),
common method bias was not an issue.

5. Results
5.1 Demographic information
Table 1 reveals the respondents’ profiles (67.9% male and 32.1% female). Up to 39.4% of the
respondents were between the ages of 41 and 50 years old. The highest education level for
58.2% of the respondents was a bachelor’s degree. Most respondents (53.9%) were SME
owners. Many respondents (40.6%) had > 20 years of experience with their present SME.
More respondents (28.5%) had worked with SMEs for 21–25 years.
Variable Frequency (N = 165) (%)
Determinants
of Facebook
Gender adoption
Male 112 67.9
Female 53 32.1
Age (years)
#30 8 4.9
31–40 52 31.5 255
41–50 65 39.4
51–60 37 22.4
>60 3 1.8
Education
Secondary school and below 22 13.3
Certificate and diploma 31 18.8
Bachelor’s degree 96 58.2
Master’s degree 15 9.1
PhD 1 0.6
Job position
SME owner 89 53.9
Marketing manager 57 34.6
IT manager 19 11.5
Duration at current SME (years)
<5 9 5.4
5–10 14 8.5
11–15 32 19.4
16–20 43 26.1
>20 67 40.6
Total years of experience
<10 12 7.3
10–15 34 20.6 Table 1.
16–20 47 28.5 Respondents’
21–25 43 26.0 demographic
>25 29 17.6 information

5.2 Profiles of the surveyed small and medium enterprises

Table 2 lists the profiles of the surveyed service-based SMEs. The majority of the SMEs
(61.80%) were small enterprises. Up to 17.6% of the SMEs provided transportation services.
Facebook had been adopted by 31.9% of the SMEs for approximately one to two years. Up
to 22.09% of the SMEs had used Facebook between six months to one year, 19.62% had
used it for two to three years, 17.79% had used it for less than six months and 8.59% had
used it for more than three years. Therefore, the respondents had sufficient experience to
respond to the survey questionnaire.
Up to 44.17% of the SMEs updated their Facebook page twice a day and 49% responded
to inquiries and comments from customers within an hour. Hence, most SMEs responded
efficiently to queries and comments on their Facebook posts.

5.3 Measurement model

The measurement model was evaluated by assessing the convergent validity, internal
consistency reliability and discriminant validity (Hair et al., 2019). The convergent
validity was assessed by evaluating the outer loading of its indicators and its values for
the average variance extracted (AVE) as proposed by Mohammad et al. (2019). Table 3
JSIT Variable Frequency (N = 165) (%)
24,3
Number of employees
10–49 (small enterprise) 102 61.8
50–199 (medium enterprise) 63 38.2
SME sector
256 Health services 20 12.1
Hotel services 23 13.9
ICT services 18 10.9
Insurance services 13 7.9
Legal services 21 12.7
Transport services 29 17.6
Waste disposal services 16 9.7
Education services 25 15.2
Duration of Facebook adoption
Less than six months 29 17.9
Six months to one year 36 22.09
One to two years 52 31.9
Two to three years 32 19.63
More than three years 14 8.59
Facebook page updates
Twice daily 72 44.17
Once daily 57 34.97
Twice weekly 24 14.72
At least once weekly 10 6.13
Response to inquiries
Within an hour 80 49
Table 2. Within a day 59 36
Profiles of the Within a week 20 12
surveyed SMEs Within a month 5 3

demonstrates that the loadings of all the items were > 0.7, except that for ORG4, ORG5,
RAD3, RAD5, RAD7 and TMS2, which were removed due to low loadings. Table 3
demonstrates that the AVE values exceeded the 0.50 threshold for all constructs
(Fornell and Larcker, 1981). Hence, convergent validity was confirmed (Henseler et al.,
2016). At the construct level, all internal consistency reliability measures confirmed the
reliability. Table 3 demonstrates that for all constructs, Cronbach’s a was > 0.7, as
required by Sekaran and Bougie (2016). rho_A was the most reliable measure of
internal consistency reliability (Hair et al., 2019), which was > 0.7 for all constructs, as
required by Henseler et al. (2015). The composite reliability (CR) for all constructs
was > 0.70 (Hair et al., 2017). Hence, the measurement model satisfied the internal
consistency reliability criteria.
Discriminant validity was assessed via the heterotrait-monotrait (HTMT) method, the
most reliable measure of discriminant validity (Henseler et al., 2015). Table 4 demonstrates
that all HTMT ratios were below the 0.90 cut-off point, as recommended by Mohammad
et al. (2019). Therefore, discriminant validity was confirmed. Hence, the convergent validity,
internal consistency reliability and discriminant validity were supported by the statistical
analysis. Thus, the measurement model satisfied all validation criteria. Subsequently, the
structural model was evaluated (Hair et al., 2017).
 Convergent validity Internal consistency reliability
Determinants
Variable Item Loading AVE Cronbach’s a rho_A CR of Facebook
adoption
Competitive pressure (CPP) CPP1 0.828 0.657 0.739 0.743 0.851
CPP2 0.792
CPP3 0.811
Financial performance (FNP) FNP1 0.772 0.592 0.861 0.864 0.897
FNP2 0.759 257
FNP3 0.733
FNP4 0.715
Government support (GBS) GBS1 0.819 0.555 0.733 0.736 0.833
GBS2 0.731
GBS3 0.814
Non-financial performance (NFP) NFP1 0.748 0.622 0.701 0.719 0.831
NFP2 0.762
NFP3 0.790
NFP4 0.801
NFP5 0.796
Organisational readiness (ORG) ORG1 0.811 0.608 0.839 0.843 0.886
ORG2 0.745
ORG3 0.867
Perceived risks (PRI) PRI1 0.872 0.655 0.736 0.753 0.85
PRI2 0.871
PRI3 0.840
Relative advantage (RAD) RAD1 0.802 0.741 0.826 0.827 0.896
RAD2 0.748
RAD4 0.753
RAD6 0.737
Top management support (TMS) TMS1 0.765 0.579 0.757 0.759 0.846
TMS3 0.847
TMS4 0.816
Facebook adoption (FAD) FAD1 0.733 0.656 0.737 0.738 0.851
FAD2 0.738
FAD3 0.779
FAD4 0.831
FAD5 0.823
FAD6 0.704

Notes: Adequate AVE was achieved by all constructs after ORG4, ORG5, RAD3, RAD5, RAD7 and TMS2 Table 3.
had been deleted due to low loadings: CPP (0.657), FNP (0.592), GBS (0.555), NFP (0.622), ORG (0.608), PRI Measurement model
(0.655), RAD (0.741), TMS (0.579) and FAD (0.656). This confirmed the convergent validity of the constructs evaluation results

5.4 Structural model

The assessment of the structural model included examination of the collinearity among the
predictor variables, coefficient of determination (R2), path coefficients ( b ), predictive
relevance (Q2) and predictive power using PLSpredict (Hair et al., 2019). The effect size (f2)
was also observed (Henseler et al., 2016). Table 5 depicts the structural model evaluation
outcomes. Hair et al. (2019) have suggested that researchers begin evaluating the structural
model by examining variance inflation factor (VIF) values to ensure the absence of
collinearity issues in the structural model. Table 5 demonstrates that the VIF values of all
constructs were lower than the threshold value of 3.3. Therefore, referring to Kock (2015),
the structural model was free from collinearity problems.
Figure 2 and Table 5 demonstrate the effects of the predictor variables on Facebook
adoption and the effect of Facebook adoption on financial and non-financial performance.
JSIT Construct CPP FAD FNP GBS NFP ORG PRI RAD TMS
24,3
CPP
FAD 0.870
FNP 0.635 0.769
GBS 0.746 0.803 0.649
NFP 0.727 0.760 0.839 0.756
258 ORG 0.752 0.769 0.461 0.632 0.534
PRI 0.731 0.719 0.691 0.623 0.657 0.504
RAD 0.804 0.820 0.624 0.631 0.675 0.606 0.544
Table 4. TMS 0.797 0.874 0.664 0.549 0.601 0.598 0.583 0.670
Discriminant Notes: CPP = competitive pressure; FAD = Facebook adoption; FNP = financial performance; GBS =
validity: HTMT government support; NFP = non-financial performance; ORG = organisational readiness; PRI = perceived
criterion risks; RAD = relative advantage; TMS = top management support

Std. Std. t- p-
Hypothesis Relationship b error value value Decision f2 R2 Q2 VIF

H1a RAD ! FAD 0.216 0.050 4.318 0.000 Supported 0.108 0.753 0.412 1.739
H2a PRI ! FAD 0.160 0.057 2.811 0.002 Supported 0.064 1.637
H3a TMS ! FAD 0.305 0.053 5.806 0.000 Supported 0.225 1.674
H4a ORG ! FAD 0.173 0.058 2.983 0.001 Supported 0.076 1.609
H5a CPP ! FAD 0.086 0.061 1.424 0.079 Not supported 0.012 2.457
Table 5. H6a GBS ! FAD 0.208 0.054 3.817 0.000 Supported 0.108 1.619
Hypotheses testing: H7 FAD ! FNP 0.614 0.067 9.185 0.000 Supported 0.606 0.377 0.194 1.000
direct effects H8 FAD ! NFP 0.653 0.053 12.383 0.000 Supported 0.744 0.427 0.238 1.000

The effect of the predictor variables on Facebook adoption yielded an R2 of 0.753. In other
words, the combined effects of all predictor variables could explain 75.3% of the variance in
Facebook adoption, indicating a substantial level of predictive accuracy (Hair et al., 2019).
Facebook adoption explained 37.7 and 42.7% of the variance in financial and non-financial
performance, respectively.
The hypothesised relations were directional. Therefore, the significance of the path
coefficients was determined via bootstrapping using a one-tailed t-test using 5,000 resamples
as per the recommendation by Henseler et al. (2016). Table 5 demonstrates the bootstrapping
results for the hypothesised relationships. Except for H5 ( b = 0.086, t = 1.424, p = 0.079), all
relationships yielded critical t-values of > 2.58, supporting the relationships in H1, H2, H3,
H4, H6, H7 and H8. Specifically, relative advantage ( b = 0.216, t = 4.318, p = 0.000),
perceived risk ( b = 0.160, t = 2.811, p = 0.002), top management support ( b = 0.305, t =
5.806, p = 0.000), organisational readiness ( b = 0.173, t = 2.983, p = 0.001), government
support ( b = 0.208, t = 3.817, p = 0.000) and Facebook adoption to financial performance ( b =
0.614, t = 9.185, p = 0.000), Facebook adoption to non-financial performance ( b = 0.653, t =
12.383, p = 0.000) were all significant and in the proposed directions.
The predictive relevance Q2 value of the model was determined using the blindfolding
procedure. A Q2 value of < 0 implies that a model for endogenous constructs lacks
predictive relevance (Hair et al., 2017). Q2 values exceeding 0, 0.25 and 0.50 represent small,
medium and large predictive relevance, respectively, of a PLS path model (Hair et al., 2019).
Table 5 demonstrates that the Q2 values were all > 0, where the Q2 was 0.412, 0.194 and
 Determinants
of Facebook
adoption

259

Figure 2.
PLS path model of the
study

0.238 for Facebook adoption, financial performance and non-financial performance,

respectively, indicating that the model demonstrated sufficient predictive relevance.
As per the recommendation by Hair et al. (2019), PLSpredict was used to examine the
predictive power of the PLS-path model. The analysis was performed with the ten-fold and
ten-repetition default configuration. Most of the root mean square error (RMSE) values in the
PLS-SEM analysis were less than their corresponding RMSE values in the naïve linear
regression model (LM). Hence, the model demonstrated medium predictive power (Shmueli
et al., 2019).

5.5 Mediation analysis

The Preacher and Hayes (2008) procedure, which infers the indirect effect of TOE factors on
financial and non-financial performance, was the basis of the mediation analysis.
Accordingly, complete bootstrapping was performed using a one-tailed test with 5,000
resamples. Thereafter, the mediating effect was assessed by examining the specific indirect
effects. Table 6 demonstrates the mediation analysis outcome. Facebook adoption
significantly mediated the relationships between financial performance and relative
advantage (H1b: b = 0.133, t = 3.895, p = 0.000), perceived risk (H2b: b = 0.097, t = 2.621,
p = 0.004), top management support (H3b: b = 0.187, t = 4.643, p = 0.000), organisational
readiness (H4b: b = 0.109, t = 2.956, p = 0.002) and government support (H6b: b = 0.128,
t = 3.474, p = 0.000).
There was no mediating effect between financial performance and competitive pressure
(H5b: b = 0.052, t = 1.414, p = 0.079). Hence, except H5b, H1b–H6b were supported. Similarly,
adopting Facebook exerted a mediating effect between non-financial performance and relative
advantage (H1c: b = 0.141, t = 4.046, p = 0.000), perceived risk (H2c: b = 0.103, t = 2.662, p =
0.004), top management support (H3c: b = 0.198, t = 5.322, p = 0.000), organisational readiness
JSIT Hypothesis Relationship Std. b Std. error t-value p-value Decision
24,3
H1b RAD ! FAD ! FNP 0.133 0.034 3.895 0.000 Supported
H2b PRI ! FAD ! FNP 0.097 0.038 2.621 0.004 Supported
H3b TMS ! FAD ! FNP 0.187 0.040 4.643 0.000 Supported
H4b ORG ! FAD ! FNP 0.109 0.036 2.956 0.002 Supported
H5b CPP ! FAD ! FNP 0.052 0.038 1.414 0.079 Not supported
260 H6b GBS ! FAD ! FNP 0.128 0.037 3.474 0.000 Supported
H1c RAD ! FAD ! NFP 0.141 0.035 4.046 0.000 Supported
H2c PRI ! FAD ! NFP 0.103 0.039 2.662 0.004 Supported
H3c TMS ! FAD ! NFP 0.198 0.037 5.322 0.000 Supported
Table 6. H4c ORG ! FAD ! NFP 0.116 0.038 2.949 0.002 Supported
Mediating effect of H5c CPP ! FAD ! NFP 0.056 0.040 1.414 0.079 Not supported
adopting Facebook H6c GBS ! FAD ! NFP 0.136 0.038 3.592 0.000 Supported

(H4c: b = 0.116, t = 2.949, p = 0.002) and government support (H6c: b = 0.136, t = 3.592, p =
0.000). Nonetheless, adopting Facebook did not mediate the relationship between competitive
pressure (H5c: b = 0.056, t = 1.414, p = 0.079) and non-financial performance. Thus, except for
H5c, H1c–H6c were supported.

6. Discussion
This study used TOE framework–RBV theory integration to explore the Facebook adoption
determinants and the direct impact of Facebook adoption on the financial and non-financial
performance of service-based SMEs in northwestern Nigeria. Furthermore, the mediating
role of Facebook adoption between the determinants and the performances of the SMEs was
assessed.
This study yielded three result categories. Firstly, from the TOE framework perspective,
in the technological context, the results supported the proposed association between relative
advantage and Facebook adoption (H1a), which is consistent with the TOE framework and
other research (Alshamaila, 2018). Relative advantage was the second most significant
predictor of Facebook adoption, indicating that understanding the benefits of adopting
Facebook would have a great impact on enhancing Facebook adoption by SMEs (Ainin
et al., 2015). Perceived risk exerted a significant negative effect on Facebook adoption (H2a),
which aligns with the TOE framework and prior studies (Omenugha, 2018). The result
suggested that the perception of risks related to Facebook adoption exerts an inhibitory
effect on Facebook adoption by SMEs. Hence, risk perception among SMEs should be
mitigated to enhance Facebook adoption.
In the organisational context, the findings demonstrate that top management support
exerted the strongest positive and significant impact on Facebook adoption (H3a),
supporting the TOE framework and past studies (Matikiti et al., 2018). The finding
demonstrated that Facebook adoption is possible only when supported by SME owners or
executive officers. Organisational readiness was a significant positive determinant of
Facebook adoption (H4a), which is similar to prior empirical research (Jambulingamis et al.,
2015). This result demonstrated that Nigerian service-based SMEs want to be certain that
they possess the required financial and technical skills before adopting Facebook (Faloye,
2014).
In the environmental context, competitive pressure was not significant (H5a), which
contradicts previous findings (Abedin, 2015). A possible explanation is that Nigerian SMEs
demonstrate a low level of Facebook adoption (Abubakar et al., 2017). Therefore, the positive
impact of Facebook adoption from their neighbouring competitors might be less obvious to Determinants
them. It was also verified that government support was a significant and positive of Facebook
determinant of Facebook adoption (H6a), reinforcing the TOE framework and past studies
(Ogbo et al., 2019). This result revealed that government assistance in the form of an
adoption
enabling environment, training for SME owners and financial assistance would enhance
Facebook adoption among service-based SMEs.
Secondly, from the RBV theory, the study demonstrated the significant positive impact
of adopting Facebook on the financial performance of SMEs (H7), supporting the RBV 261
theory and some previous studies (Cao et al., 2018). This outcome demonstrates that
effective Facebook adoption will aid the enhancement of SME financial performance, such
as increasing sales and profits and reducing marketing costs. Facebook adoption was also
confirmed to exert a significant positive influence on the non-financial performance of SMEs
(H8), which agrees with the RBV theory and previous research (Alalwan et al., 2017). The
results demonstrated that effective Facebook adoption will improve the non-financial
performance of SMEs, such as better customer relationships and brand awareness. Lastly,
analysis of the mediating effect of Facebook adoption revealed that, apart from competitive
pressure, adopting Facebook mediated the relationships between all TOE factors and
financial and non-financial performance.

6.1 Theoretical implications

There are limited empirical investigations on the effect of adopting Facebook on the
performance of SMEs, especially from developing nations (Oyewobi et al., 2021). Thus, this
study contributes to bridging this gap. The integrative model exhibited high explanatory
power for examining the determinants of Facebook adoption and its impact on the financial
and non-financial performance of SMEs in the context of Nigerian service-based SMEs, on
which researchers rarely focus. Thus, the research model can act as a robust framework for
comparable investigations in the future. This study is possibly among the first to
investigate the effect of Facebook adoption on the financial and non-financial performance
of SMEs. Furthermore, it is perhaps also among the first studies to confirm the mediating
effect of Facebook adoption between TOE factors and the performance of SMEs, enriching
the literature on organisational Facebook adoption.

6.2 Practical implications

6.2.1 Implications for service-based small and medium enterprises. Technologically, SME
owners should understand that Facebook can confer more benefits on their business than
other marketing techniques, lending them a competitive advantage. Nigerian service-based
SMEs must also cultivate a digital culture to support Facebook adoption. They should
realise that the benefits of adopting Facebook outweigh the risks. SMEs should also be
aware that adopting Facebook is an essential strategy for growth and competitive
advantage in the modern market.
Organisationally, SME owners should commit to Facebook to gain maximum benefits
from adopting the platform, allocate resources for it and support and encourage its
successful adoption. SME owners should use Facebook to establish a strong relationship
with customers, build their reputation, promote their services and enhance their market
share. They should ensure that their Facebook pages are updated with exciting content to
engage existing customers and attract new ones. Moreover, they should guarantee timely
responses to customer enquiries and comments. SMEs must collect and analyse customer
feedback and respond to customer needs. SME owners must understand that Facebook is
suitable for their business.
JSIT In the environmental context, SME owners should focus on customer demand for
24,3 adopting Facebook to improve customer relationships. Moreover, service-based SME
owners should know that SMEs that adopt Facebook have a better chance of gaining more
customers, as Facebook is the most popular social medium in Nigeria.
6.2.2 Implications for Facebook developers. The major barrier to Facebook adoption was
perceived risk. Therefore, Facebook developers should improve its security features to
262 alleviate the strong fear of probable security and privacy violations from adopting
Facebook. Moreover, the features of Facebook should be expanded to improve its relative
advantage compared to other marketing techniques.
6.2.3 Implications for policymakers. This study indicated that the Nigerian government
can motivate Facebook adoption by Nigerian service-based SMEs by increasing its support
for the sector. The support could be in the form of training or workshops for service-based
SME owners on the benefits of Facebook and strategies for adopting Facebook, more
deterrent cybercrime regulations, tax reduction based on Facebook adoption, more stable
electricity supply and collaboration with Nigerian telecommunication providers to ensure a
better internet connection and reduced data bundle prices.

7. Limitations and future directions

Despite its useful contributions, this study has a few limitations that can guide
investigations in the future. This study involved service-based SMEs in northwestern
Nigeria and cannot be generalised to SMEs in the other Nigerian regions. Nevertheless, the
research model can be tested with service-based SMEs in different Nigerian areas. This
study used a quantitative technique, but future studies could consider a qualitative
approach to examine whether additional insight can be obtained. Future research could also
investigate the connection between firm strategy and the impact of adopting Facebook on
the financial and non-financial performance of SMEs. This study used a cross-sectional
approach, so future studies could consider a longitudinal approach to examine the impact of
Facebook adoption over time.

8. Conclusion
This study used the TOE framework and RBV theory integration to examine the
determinants of Facebook adoption and the immediate impact thereof on the financial
and non-financial performance of service-based SMEs in northwestern Nigeria. The
mediating effect of Facebook adoption on the relationships between the Facebook
adoption determinants and SME performance was assessed. It is proposed that
Facebook permits resource-limited service-based SMEs in developing countries to
communicate effectively with customers and other business stakeholders to enhance
business performance. Specifically, how Facebook enables service-based SME
enhancement of customer relationships and loyalty; brand awareness creation; and
benefits such as improved market share, reduced marketing cost and increased sales
and profits was highlighted.
The determinants presented Nigerian service-based SME decision-makers with insight
into factors on which to focus for effective Facebook adoption. The results suggested that
adopting Facebook would have a significant effect on SME financial and non-financial
performance. Furthermore, its mediating effect between all important determinants and
financial and non-financial performance was confirmed. Lastly, this study presented
important theoretical and practical implications for SME decision-makers and policymakers
and Facebook developers.
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Corresponding author
Idris Na’umma Abdullahi can be contacted at: idrisnaumma@student.usm.my

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