Abstract
The literature has proposed several barriers to Industry 4.0 adoption or digitalisation. The present study assesses how the intrinsic and extrinsic barriers to digitalisation affect Industry 4.0 adoption by the firms. The paper also evaluates how these barriers influence the linkage between digitalisation and the firm’s performance with regards to its supply chain competency as well as operational performance. Sketching the arguments from the resource-based view as well as the contingency approach, a model for Industry 4.0 adoption is developed. Eight hypotheses encompassing the intrinsic and extrinsic barriers to digitalisation, digitalisation practices, and two constructs of firm performance constitute the model, which is tested on 143 manufacturing companies using Analysis of Moment Structure (AMOS). The findings suggest that intrinsic and extrinsic barriers are negatively linked with the digitalisation. The analysis also reveals that Industry 4.0 adoption improves operational performance as well as supply chain competency. The paper sheds light on the contingency effects of extrinsic barriers on digitalisation. This research would assist the practitioners and policymakers to comprehend the impact of intrinsic and extrinsic barriers.
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