Article The barriers that hinder the adoption of e-commerce by small businesses: Unique hindrance in Palestine Ahmed A Abualrob Ministry of Jerusalem Affairs, Ramallah, Palestine Juyoung Kang Ajou University Business School Abstract Palestine is one of the developing countries that have recently realized the benefits of e-commerce (EC), but several barriers are impeding its adoption there. This study highlights the major barriers to EC adoption in Palestine using a TOE framework, the model of innovation resistance, and other related theories such as diffu- sion of innovation (DOI). An online survey collected data from 161 business owners in Palestine, and the model has tested through structural equation modeling (SEM) to analyze the survey respondents. The study has found that the occupation restrictions and the political factors are the major barriers that prevent the adoption of ecommerce in Palestine, while it has found that some barriers have weakly affected the adoption or had no influence, such as perceived financial losses. It is expected that this research will benefit many parties in Pales- tine, by being the first of its kind to tackle the occupation’s impact on EC in Palestine, and that by avoiding such barriers investment in EC will increase in Palestine in the future. Keywords e-commerce barriers, e-commerce adoption, small businesses, Israeli occupation, Palestine Submitted: 15 June, 2015; Accepted: 12 September, 2015. Business owners’ decisions about adopting electronic commerce in Palestine are significantly affected by government instability and the restrictions enforced by the occupation. Introduction The world is seeing significant shifts in industry practices that are changing traditional ways of conducting businesses. In this dynamic change, e-commerce and e-business have increasingly become necessary components of the business world and strong catalysts for economic development (Salehi and Alipour 2014). Palestine has a modest ICT sector with the potential for growth, placing it in a good position relative to its neighbors; hence, e- commerce (EC) could support this sector’s develop- ment and sustain its growth. Palestine is still in the early stages of EC usage; it was late in realizing the benefits of the Internet and lags behind in EC implementation (Qadri 2013). Palestine’s IT sector was established in the 1990s and is still in the process of becoming fully developed and properly equipped (Dabour 1998). Palestine boasts a penetration rate of 40%, and the Palestinian Telecommunications Com- pany (the PalTel Group) has over 2.58 million Inter- net subscribers (Roth et al. 2013). Corresponding author: Juyoung Kang, Ajou University Business School, 206, Worldcup- ro, Suwon, Kyonggi-do 443749. T: 82-31-219-2910 F: 82-31- 219-1616. Email: jykang@ajou.ac.kr Information Development 2016, Vol. 32(5) 1528–1544 ª The Author(s) 2015 Reprints and permission: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0266666915609774 idv.sagepub.com by guest on October 2, 2016 idv.sagepub.com Downloaded from