Predictors of cloud computing adoption: A cross-country study

Abstract

Cloud computing (CC) has become a powerful driver of technological and economic transformation across nations. Yet levels of cloud service adoption vary, with limited adoption in many countries. For broader transformation, it is important to understand the predictors of CC adoption in order to design effective promotion policies. This study employs an institutional perspective to model technological and environmental predictors of country-level CC adoption, as measured through a nation's per capita CC expenditure. The model was validated through an econometric analysis using panel data for 45 countries globally over a five-year period. Legal system quality and broadband penetration, among other determinants, are found to be robust predictors of CC adoption. At the same time, we uncover evidence for the “digital legacy” problem, in which trade-dependent countries struggle to enhance CC adoption because their export-oriented firms have invested in more traditional digital assets. Finally, we find that countries with large service sectors have relatively high current levels of CC adoption but low growth in adoption. The study makes contributions by identifying these key predictors and providing policy implications for the promotion of CC adoption.