Small and Medium Enterprises’ Digital Transformation Intention based on the Trade-off Theory: Role of Perceived Benefit and Perceived Privacy Disclosure Risk

Small and medium enterprises (SMEs) are critical for economic growth but often lag in digital transformation. Adoption decisions depend on the trade-off between expected benefits and perceived risks. This study develops and tests a research model grounded in trade-off theory to explain SMEs’ digital transformation intentions based on perceived benefits and perceived privacy disclosure risks. A survey was conducted with 212 SME leaders in Vietnam. The results of structural equation modeling support hypotheses that perceived benefits positively influence perceived value and digital transformation intention, while perceived privacy disclosure risk negatively impacts perceived value and intention. Perceived value positively affects intention, supporting its role as the cognitive trade-off mechanism. The findings validate applying trade-off theory to examine how SMEs weigh expected benefits and perceived risks in forming digital transformation intentions. Theoretical contributions include enriching technology adoption research and empirically examining the undertheorized risk of privacy disclosure. Practical implications suggest emphasizing communicating benefits, addressing privacy concerns, and reshaping the benefit-risk trade-off calculus to promote digital adoption among SMEs.