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SME e-readiness in Malaysia: Implications for Planning and Implementation - page 21 / 44

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Goodness of Measures

E-readiness Measurement

The 21-item scale measuring the e-readiness of the SMEs (dependent variable) was submitted

to a principal components analysis with varimax rotation. All the items have value of

Measures of Sampling Adequacy (MSA) more than 0.5. Besides, Kaiser-Meyer-Olkin

Measure of Sampling Adequacy is 0.86 and Bartlett's Test of Sphericity is significant with

value 0.00.

Based on the rotated component matrix, out of the 21 items, ten items (question 2, 3, 4, 5, 7, 9,

10, 11, 12 and 21) were dropped as they have high cross loadings. Four factors met the

selection criteria of eigenvalues greater than 1.0, explaining a total of 74.95% of the variance.

All the items selected had factor loadings greater than 0.50. However, factor 3 has been

dropped because it had only one item (question 19). Thus, we have retained only three factors

with 10 items for the e-readiness measurement with a total variance explained of 67.27%.

(see Table 5)

[Insert Table 5 about here]

Reliability of the Measures

Table 6 presents the reliability coefficients for the main variables of the study.

[Insert Table 6 about here]

The reliability analysis, assessed with Cronbach’s Alpha reliability test, was carried out in

order to ensure the internal stability and consistency of the items used in each variable. The

values ranged from 0.68 to 0.94 and can be considered to be reliable.

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