Determinants of Green Technology Adoption in Malaysian SMEs: Evidence from the TOE Framework

This research examines the adoption of green technology and its effects on the economic and environmental sustainability of small and medium enterprises (SMEs) in Malaysia, particularly within the manufacturing sector. Although renewable energy and green technologies have experienced significant growth, the adoption rate among SMEs remains low due to financial constraints, limited technical expertise, and uncertainty regarding the long-term benefits of implementation. This study aims to evaluate the level of green technology adoption among Malaysian manufacturing SMEs, identify the determinants influencing its adoption, and examine the impact of adoption on SME performance. A quantitative research design was employed, targeting manufacturing SMEs in urban and semi-urban areas of Malaysia through a structured questionnaire survey. The study adopted the Technology–Organization–Environment (TOE) framework to investigate the determinants of green technology adoption. Data were analyzed using descriptive statistics, reliability analysis, correlation analysis, and regression analysis with SPSS. The findings indicate among the TOE dimensions, environmental factors were found to have a significant influence on SME performance, while technological and organizational factors showed insignificant relationships. The results suggest that external influences such as government regulations, market demand, sustainability initiatives, and stakeholder pressures play a crucial role in enhancing SME performance through green technology adoption. The study highlights the importance of a supportive external environment in promoting sustainable business practices and improving the long-term competitiveness of Malaysian manufacturing SMEs.

Green Technology; SMEs; Technology; Organization; Environment; Sustainability

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