Illuminating pandemic shadows: Digital financial capability and sustainable entrepreneurship across developed and emerging economies

Introduction: MSMEs in Indonesia, particularly in Kupang City, face various challenges such as weak financial management, low levels of financial literacy and inclusion, and limited adoption of digital financial technology. Many business actors are unable to separate personal and business finances, lack proper financial record-keeping, and often make emotional financial decisions. Additional barriers include limited access to formal financial services due to negative perceptions of high interest rates and complex banking procedures. Unproductive financial behavior also weakens financial resilience and threatens business sustainability. Objectives:This study aims to analyze the influence of financial literacy, financial inclusion, and digital financial capability on personal finance and financial behavior, as well as their impact on the business sustainability of MSMEs. Additionally, the study evaluates the mediating role of personal finance and financial behavior and the moderating role of financial resilience. Methods: A quantitative approach was employed using Structural Equation Modeling with Partial Least Squares (SEM-PLS) on a sample of 154 food and beverage MSMEs in Kupang City that have been operating for more than five years. Results: The results indicate that financial literacy and financial inclusion significantly influence personal finance, while financial inclusion and digital financial capability affect financial behavior. However, only personal finance has a significant impact on business sustainability. No significant mediating or moderating effects were found. Conclusions: Strengthening the personal financial capacity of MSME actors is crucial to supporting business sustainability. Interventions such as financial management training, improving literacy in formal financial services, and fostering healthy financial behavior are essential. These findings offer theoretical and practical contributions to empowering MSMEs through an integrated and sustainable financial approach

This study aims to explain and analyze the effect of digital capabilities on digital capabilities and the sustainability of small businesses. This research is classified as explanatory research using a quantitative approach. This study involved 153 creative small businesses in Surabaya City with three leading sectors: fashion, culinary, and interior design. The sampling technique used proportional random sampling. The questionnaire was distributed using Google Forms. The study results show that Digital Capability has a significant effect on Digital Innovation; Digital Capability and Digital Innovation have also been directly proven to improve the Business Sustainability of small business owners during the Covid 19 pandemic. Digital Capability will increase the sustainability of small and large businesses if, at the same time, business owners also increase Digital Innovation in managing both the innovation process, organizational innovation management, and innovation in marketing. These three innovations can mediate and strengthen the influence of Digital Capability on SMEs' Business Sustainability.

ABSTRACTAlthough sustainable entrepreneurship (SE) is increasingly recognized as a vital solution to global problems, the influence of financial compliance—specifically, anti‐money laundering (AML) laws on SE remains unexplored. This paper investigates the impact of digital financial capability (DFC) on sustainable entrepreneurship in 100 countries between 2012 and 2022, considering the moderating influence of AML compliance. The study incorporates various factors to develop DFC and SE indices. To address potential endogeneity, heteroscedasticity, and autocorrelation in the data, this study uses the two‐step system generalized method of moments (GMM) approach, which is assessed using Driscoll–Kraay (D–K) regression, to guarantee robust and trustworthy estimates. The findings revealed that countries within the sample, theoretically align with Dynamic Capability Theory regarding the relationship between DFC and SE. Furthermore, the moderating role of AML compliance has a positive impact on the DFC‐SE relationship in advanced countries, increasing it by 20.2%. However, AML laws moderated the adverse effects of DFC on SE in developing countries by 45.8%, driven by variations in regulatory stringency between developed and developing countries. This study closes a significant gap in the literature by incorporating financial compliance into the DFC–SE relationship. These insights help entrepreneurs and financial institutions to optimize costs and promote ethical practices by understanding risk profiles.

With the rise of digital transformation in all domains, the relationship between digitalization and sustainable entrepreneurship has received growing attention. In practice, a new sustainable entrepreneurial model called “digital sustainable entrepreneurship” (DSE) has emerged. Aiming to establish a DSE model based on digital capability (DC) and digital innovation orientation (DIO), this study explored what kind of digital capability could be built to lead to a boost in digital sustainable entrepreneurship, to realize the creation of social and environmental value. We also revealed how DC affected DSE by introducing DIO and discussed the moderating role played therein by the manager’s cognition of sustainable opportunities (MCSO). The study adopted CFA and SEM on the model using AMOS 27.0 and used the multiple regression analysis method to conduct an empirical study into the data from 308 SMEs in pollutive industries to validate the research framework. The results show a positive relationship between DC and DSE; DC is positively correlated to DIO; DIO is positively correlated to DSE; DIO plays a partial mediating role between DC and DSE; and MCSO positively moderates the relationship among DC, DIO, and DSE. This study will be of practical significance regarding how sustainable entrepreneurs can boost digital sustainable entrepreneurship.

This paper investigates the relationship between sustainable entrepreneurship and financial inclusion, financial literacy, and entrepreneurial orientation. As sustainable entrepreneurship gains academic and practical interest, understanding factors that enable entrepreneurs to operate sustainably is fundamental. The manuscript uses an electronic questionnaire distributed to key economic stakeholders and performs partial least squares structural equation modeling on data from 169 respondents. The results show that entrepreneurial orientation has a positive and significant impact on sustainable entrepreneurship, with a beta coefficient of 0.878 and a probability value of less than 0.01. Financial literacy significantly influences sustainable entrepreneurship, with a beta coefficient of 0.389 and a probability value of less than 0.001, and it partially mediates its relationship with financial inclusion, showing a beta coefficient of 0.3 and a probability value of 0.013. Financial literacy and financial inclusion are positively correlated, with a beta coefficient of 0.771 and a probability value of less than 0.05. However, the impact of financial inclusion on sustainable entrepreneurship is negative and insignificant, with a beta coefficient of −0.392, and there is no evidence that entrepreneurial orientation moderates the link between financial literacy and sustainable entrepreneurship. The findings provide valuable insights for Moroccan policymakers to promote entrepreneurship, suggesting that financial literacy plays a crucial role in enhancing sustainable business practices. The study emphasizes the need for Morocco to adapt to current programs and create a supportive financial environment for entrepreneurs. Due to a lack of comprehensive datasets, the study’s conclusions are limited and might not accurately reflect the entire landscape.

Women, as craft business owners, must possess knowledge about financial inclusion and financial stability because it has an impact on business sustainability. This paper aims to test the effect of financial literacy and financial well-being on business sustainability, with digital financial inclusion as a moderating variable. This paper uses 236 female export craft MSME actors in East Java Province. Structural equation modeling (SEM) was used to test the hypotheses. The findings show that financial literacy and financial well-being affect business sustainability. Financial knowledge of MSME actors, both knowledge of debt and bookkeeping with the ability to record finances, impact business sustainability. Financial well-being also contributes to business sustainability with healthy finances and a perception of financial adequacy and financial resources to manage the business. Financial well-being can mediate the influence of financial literacy on business sustainability, where increasing financial well-being is necessary because the role of financial literacy can improve the business sustainability of female MSME actors in East Java. Digital financial inclusion can moderate financial well-being’s influence on business sustainability by using digital products and digital systems. The research findings can be taken into consideration by the government and used as material for policy studies on the importance of mastering digital financial inclusion in the sustainability of MSMEs. AcknowledgmentsGratitude is extended to the Ministry of Education, Culture, Research, Technology, and Higher Education for providing complete financial support to this research project through a Regular Fundamental Research grant.

The tourism and hospitality sector are a strategic contributor to regional economic growth; however, many Micro, Small, and Medium Enterprises (MSMEs) in this sector continue to experience challenges in applying effective financial management practices, particularly in adopting digital budgeting systems. Following the development of an Android-based financial management application utilizing the Zero-Based Budgeting (ZBB) approaches, this community service activity focuses on the socialization and practical implementation of the HospiBudget application for hospitality and tourism MSMEs in West Java. The socialization program was designed to address the gap between technological innovation and users’ financial literacy and digital capability. Activities included guided training sessions, hands-on application usage, and discussions on zero-based budgeting concepts tailored to hospitality operations. The program was conducted with MSME participants in the hospitality and tourism sector across several regions in West Java. The results indicate that the socialization significantly enhanced participants’ understanding of ZBB principles, improved their ability to utilize digital budgeting tools, and increased awareness of cost efficiency and cash flow control. This activity demonstrates that application socialization is a critical continuation stage of digital innovation, ensuring that technological solutions such as HospiBudget are effectively adopted and contribute to improved financial governance, business sustainability, and competitiveness of hospitality and tourism MSMEs

This study aims to examine the effect of financial attitude and accounting information systems on business sustainability, with financial literacy as a mediating variable, among Micro, Small, and Medium Enterprises (MSMEs) in Gorontalo City. This research adopts a quantitative approach using a causal survey design. Data were collected through questionnaires distributed to 100 MSME owners in Gorontalo City and analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The results indicate that financial attitude has a positive and significant effect on business sustainability. Meanwhile, accounting information systems do not have a significant direct effect on business sustainability. Furthermore, financial literacy is not able to mediate the relationship between financial attitude and business sustainability. However, financial literacy significantly mediates the relationship between accounting information systems and business sustainability. These findings suggest that business sustainability among MSMEs is strongly influenced by internal financial behavior and competencies. Financial literacy plays a crucial role in transforming accounting information into meaningful managerial decisions that support long-term business sustainability. This study contributes to the Resource-Based View (RBV) theory by highlighting financial literacy as a strategic intangible resource for MSMEs.

Digital transformation as the driving force for sustainable business performance: A moderated mediation model of market-driven business model innovation and digital leadership capabilities

This research aims to examine the sustainability of micro, small, and medium enterprises (MSMEs) in the tourism sector of Kintamani during the pandemic, with a specific focus on the role of financial literacy as a key factor in maintaining business sustainability. The Resource-Based View (RBV) theory serves as the primary foundation for this research, depicting financial literacy as a crucial internal resource for gaining a competitive advantage and achieving business sustainability. The research method applied is quantitative with a positivism paradigm, utilizing a variance-based or component-based approach with Partial Least Squares (PLS) to test hypotheses and form a suitable model. The research population involves MSMEs in the tourism sector of Kintamani. The findings of this research affirm that financial literacy has a significant contribution to business sustainability. This achievement is further strengthened by the discovery that financial inclusion acts as a mediator in the relationship between financial literacy and business sustainability. The contribution of this research lies in enhancing the understanding of the crucial role of financial literacy in supporting business sustainability amid the pandemic conditions. Subsequent research could further develop studies on variables influencing business sustainability, thereby enriching the understanding of factors affecting business continuity.

In the Indonesian economy, Micro, Small and Medium Enterprises (MSMEs) play an important role in developing economic activities. Financial problems are one of the problems that often occur in micro, small and medium scale businesses (MSMEs) in Indonesia. This research aims to determine the influence of Financial Literacy and Financial Inclusion on Business Sustainability which is mediated by Financial Behavior. The population in this study were beverage MSMEs in Sukabumi City. There were 140 MSMEs sampled in this research, which was the result of a probability sampling technique using simple random sampling. The analysis technique used in this research is path analysis . The results of this research show that (1) Financial Literacy does not have a significant influence on Business Sustainability (2) Financial Inclusion has a significant influence on Business Sustainability , (3) Financial Behavior has a significant influence on Business Sustainability , (4) Financial Behavior cannot mediate the relationship between Financial Literacy and Business Sustainability , and (5) Financial Behavior mediates the relationship between Financial Inclusion and Business Sustainability.

In the post-COVID-19 era, the content of work and the necessary skills are rapidly changing due to the digital transformation of the way people work. Entrepreneurial adaptability and digital capability are the most necessary competencies for exploring opportunities and quickly turning them into a professional career amid a crisis. Financial literacy is also essential for expanding skills in economic and social life. The purpose of this study is to verify the influence of university students’ financial literacy and digital capability on entrepreneurial intention and the mediating effect of entrepreneurship. To this end, a survey was conducted on university students in Busan and Gyeongnam, and a sample of 162 respondents was verified using SPSS 28.0. As a result of the study, it was found that financial literacy had a partially positive effect on entrepreneurship and entrepreneurial intention. Digital capability was found to have a positive effect on entrepreneurship and entrepreneurial intention. It was found that entrepreneurship had a partially positive effect on entrepreneurial intention. It was found that entrepreneurship had a partially positive mediating effect between financial literacy and entrepreneurial intention. It was found that entrepreneurship had a positive mediating effect between digital capability and entrepreneurial intention. As a result of this study, it was confirmed that financial literacy, digital capability, and entrepreneurship are very important competencies for university students to adapt to new trends and promote start-ups in a rapidly changing job environment after COVID-19, suggesting the need for further education.

Micro, small, and medium-sized enterprises (MSMEs) are among the cornerstones of the Indonesian economy that managed to survive the world crisis. The development of MSMEs also demands that owners be ready to compete with other MSMEs. This study aims to analyze whether business sustainability is influenced by financial literacy with financial behavior and financial technology as mediators. The research sample includes owners and managers of MSMEs in Indonesia, totaling 342 respondents. Data collection methods used are non-probability sampling techniques by distributing questionnaires. This study uses SEM analysis with PLS analysis tools. It was found that financial literacy does not directly affect business sustainability but affects financial behavior and financial technology. Financial behavior and financial technology are proven to influence business sustainability. Furthermore, financial behavior and financial technology mediate the effect of financial literacy on business sustainability. The results of this study show that financial behavior and financial technology can fully mediate the relationship between financial literacy and business sustainability. Moreover, financial literacy cannot directly affect business sustainability, which must be fully mediated by financial behavior and financial technology. This study also provides practical value regarding the sustainability of MSMEs. Thus, companies can survive in the long term not only with a robust financial literacy foundation but they must be supported by good financial behavior and also be able to choose the right financial technology in their business activities.

Micro, Small and Medium Enterprises (MSMEs) currently require good financial performance for sustainability and decision making. In the future, MSMEs will only develop in terms of quantity but have not been matched by good quality. For this reason, financial literacy and digital innovation are things that support the performance of MSMEs. Finding out (1) how financial literacy affects MSME performance, (2) how digital innovation affects MSME performance, and (3) how financial literacy affects MSME performance through business sustainability are the goals of this study (4) the influence of digital innovation on MSME performance through business sustainability. The population in this study are all owners and managers of East Surabaya Bulak Fish Center (SIB) MSMEs who run a trading business in food, drinks and souvenir accessories. The study sample consisted of seventy-five individuals who were managers or owners of businesses. Saturated sampling was the method of sampling, and partial least squares (PLS) analysis was the method of analysis. The findings of this study show that (1) financial literacy increases the contribution to the performance of MSMEs, (2) digital innovation increases the contribution to the performance of MSMEs, (3) financial literacy increases the contribution to the performance of MSMEs through business sustainability, (4) digital innovation increases the contribution to MSME performance through business sustainability.

The business sustainability of the batik SMEs is a hot topic for research, considering that the batik industry has a historical and cultural background. This study aims to create a theoretical model of business sustainability that is influenced by financial literacy and is mediated by intellectual capital and risk attitudes. The research location was in Kediri, East Java province, with 36 respondents taken by simple random sampling. Data was taken using a questionnaire using a Likert scale. Data analysis uses the SEM structural equation with the SmartPLS application. The results showed that financial literacy had a positive and significant effect on business sustainability, financial literacy had a positive and significant effect on intellectual capital, and financial literacy had a positive and significant effect on risk attitude. Intellectual capital had a positive and significant effect on business sustainability. However, the risk attitude variable does not affect business sustainability. Then the effect of financial literacy on business sustainability mediated by intellectual capital has positive and significant results. Meanwhile, the influence of financial literacy on business sustainability mediated by risk attitude obtained insignificant results.