DIGITAL BUSINESS LITERACY, FINANCIAL LITERACY, AND SME PERFORMANCE: A PATH ANALYSIS FROM EMERGING ECONOMY CONTEXTS

Abstract

Background: MSMEs in Makassar City are the economic engine, but improving their performance is still constrained by the ability to manage finances and utilize digital technology. The purpose of the study: to analyze the influence of financial literacy and digital business literacy on the performance of MSMEs with entrepreneurial motivation as a mediating variable.

Research method:  an inferential quantitative approach through a questionnaire survey of 99 MSME actors, tested for validity, reliability and analyzed using path analysis.

The results of the study: financial literacy and digital business literacy have a significant positive effect on entrepreneurial motivation; entrepreneurial motivation has a significant positive effect on performance; the direct influence of both literacy on performance is not significant, but indirectly significant through motivation.

Research novelty: affirms the role of entrepreneurial motivation as the main mediator in the relationship between financial and digital literacy to the performance of MSMEs in the context of Makassar. The implication is that literacy improvement programs should be designed to be practical and behavior-oriented in order to trigger motivation and business innovation in the midst of fierce digital competition.

Limitations of the study: the sample was limited to 99 MSMEs in a single city and the cross-section design was perception-based, so cross-region generalizations and time dynamics have not been tested.