Journal of Economics and Trade

Rural small and medium-sized enterprises (SMEs) may benefit from digital infrastructure when connectivity is converted into productive online business activity. This study analyses how digital infrastructure and digital business practices are associated with online business adoption and growth among small and medium-sized enterprises (SMEs) in rural Sleman Regency, Indonesia. Using a quantitative cross-sectional survey design, data were collected from 200 SMEs located around hamlet Wi-Fi facilities and analyzed using binary logit and ordered logit models. The results show that education (coefficient = 0.787; P = .029), turnover (coefficient = 1.45E-07; P = .041), and duration of Wi-Fi use (coefficient = 0.485; P < .001) are positively associated with online business adoption. Wi-Fi availability for e-business (coefficient = 5.135; P = .003), online sales (coefficient = 4.500; P = .003), innovation (coefficient = 3.738; P = .002), and access speed (coefficient = 2.312; P = .041) are also significant determinants in the second model. The ordered logit model indicates that e-commerce is positively associated with higher SME growth categories (coefficient = 4.562; P < .001), while general internet use is not significant. These findings indicate that rural digitalization supports SME performance when infrastructure is accompanied by productive e-commerce use, innovation, and digital capability, although the results should be interpreted as associations rather than causal effects.