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C. Variables Used in the Analysis

1. Employer-Provided Training (ET): The survey ask the CEO, general manager, or business owner whether their employees received any training pertaining to the adoption of the TI.

H1 Employees training has a significant relationship on the TI adoption.

2. Firm characteristics (FC): There are four main characteristics in this survey, namely, (1) firm size, (2) regional and (3) firm status establishment[1], and

(4) employees skill for the year of 2004 and 2005.

H2 Firm characteristic has a significant relationship effect on the TI adoption.

3. Innovation activities (IA): The CEO is asked if there are any innovation activities in the past 3 years. The indicator for innovation activities is measured from what percent of the plant's sales for new products account for in 2006 and what percent of exports did the new product account for in 2006 and the firm planning to introduce new designs/products in the next 2 years.

H3 Innovation activities have a significant relationship on the TI adoption.

4. Adoption of TI Process: The first part of the survey asks the CEO, general manager, or business owner to indicate whether the firm has undertaken any TI process for the last 2 years. The six indicators of TI are as follows:

(i) Upgraded machinery and equipment in the last 2 years

(ii) Entered new markets due to process improvement in quality or cost

(iii) Filed any patents/utility models or copyright-protected materials

(iv) Developed a major new product line

(v) Upgraded an existing product line

(vi) Introduced a new technology that has substantially changed the main product that is produced

D. Statistical Analysis

Statistical analysis was carried out to determine on how a TI adoption is associated with the firm size. From the analysis, large firm is likely to adopt major processes of TI and implement innovation activities followed by medium and small firms. Furthermore, large firms have more skilled employees, and the percentage of employees who received training is greater than the medium and small firms. The firm that doesn't adopt TI (IT-based) was given a list of six factors and asked which of these critical factors had impeded the adoption of TI. The finding suggests that small firms were more likely to having greater percentage in critical important response in the six factors followed by medium and larger firms. The most critical factors are lack of up-to-date information and lack of knowledge and training.

  • [1] This variable is unique because it is only applied in Malaysia. Firm status establishment refers to firm establishment either Bumiputera or non-Bumiputera. According to Bumiputera-controlled companies (BCCs), 50 % of the equity is owned by Bumiputera shareholder or at least 30 % of its equity is owned by individual Bumiputera shareholder
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