The impact of enhancing digital financial literacy on firm performance: evidence from digitalisation in Indonesia

Digital technologies, which have made significant progress in the last two decades, have paved the way for the emergence of many new-generation devices, platforms and applications. The increase in the use of these technologies has transformed many activities in daily life and significantly changed the business world. The concept of digital transformation, which has become a popular motto for many companies today, has improved the interaction between companies and consumers and changed how companies do business, making the transformation necessary. Digital transformation in businesses can be partial (such as establishing new departments or marketing channels) or major (such as changing the entire business model). In any case, digital transformation is a necessity of the current age. Human capital is vital in increasing the firm performance of companies and gaining a competitive advantage against their competitors. Today, one factor that can improve employees’ task performance in digital economies is digital competencies. Therefore, having a certain level of digital literacy among employees is crucial for companies to achieve adequate performance in digitalization and beyond. From this perspective, this research aims to determine the effect of employees’ digital literacy on their task performance and firm performance. Investigation of this topic in the paper is carried out in the following logical sequence: First of all, the research presents the conceptual framework for digital literacy, task performance, and firm performance. The results of studies in the literature are presented, and the hypothesis development process is based on the research results. The subsequent section provides information about the study’s methodology and findings. Finally, the research concludes with the results and discussion section. Within the scope of the study, data were collected from 222 white-collar employees in Istanbul through online questionnaires. A convenience sampling technique was used to determine the sample. SPSS 25 and SPSS Process 2.13 package programs were used to analyse the data. The research results show a medium-level relationship between digital literacy and task performance, a medium-level relationship between digital literacy and firm performance, and a high and positive relationship between firm performance and task performance. According to the mediation analysis results, employees’ digital literacy positively affects task performance and firm performance. In addition, it has been determined that task performance plays a mediating role in the effect of employees’ digital literacy on firm performance. It appears that company managers should prioritize the focus of the «Reskilling Revolution Initiative», which emphasizes the transformation of employees’ skills to attain sustainable competitive advantage and enable digital transformation.

Background – The penetration of technology into economy sector effects individual ability to adapt the use of technology. It has impacted on the changes financial behavior by the ease of shopping and payment transactions which leads to extravagant. Moreover, those generation has high rate of debt compared than other generation whilst they have high financial literacy and digital financial literacy. Both skills suggest do not automatically effecting good financial behavior. Previous research has focused more on the direct affecting of financial literacy and digital financial literacy on financial behavior. However, this study attempts to explore by using demographic vaariables such as gender, given that is a factor that can effecting financial decision making, especially for Milenial and Z generation. Aim – This study aims to investigate the effect of financial literacy and digital financial literacy towards financial behavior for Z and Milenial generation by using gender as moderating variable. Design / methodology / approach – This study uses cross-sectional survey conducting in Province of Papua Barat Daya. The sample consist of 420 individual of Milenial and Z generations. Structural Equation Model and Partial Least Square (SEM-PLS) used for analysis techniques. Findings – The result shows that gender does not significantly strengthen the effect of financial literacy and digital financial literacy on the financial behavior of milenial and Z generation. While financial literacy and digital financial literacy have significant effect toward financial behavior. Research implication – This study reinforces previous research that showing financial literacy and digital financial literacy contribute in shaping financial behavior, particularly among young generation. Furhermore, the moderating variable of gender do not significantly strengthen the influence of financial literacy on digital financial literacy due to the widespread exposure and equitable to information. Policy maker, teacher, and financial institution should collaborate to design in order to strengthen young generation understanding of financial literacy and digital financial literacy through comprehensive learning embedded in the curriculum Limitations – The future research can use the alternative moderating variable that used in order to further analysis towards financial literacy and digital financial literacy to financial behavior.

The COVID-19 pandemic has negatively impacted the economic growth of Indonesia. Government regulations to limit large-scale social activities has caused marketing and financial difficulties for micro, small and medium enterprises (MSMEs). Digital and financial literacy have the potential to overcome the problems. This study attempts to identify the determinants of MSME sustainability during the pandemic. By using a questionnaire, this study collected 204 data from MSMEs for further analyses. MSME sustainability is influenced by the digital and financial literacy of MSME owners and is a cause for concern. The implementation of health and safety measures (HSM) has an insignificant impact on business sustainability, but HSM affects financial and digital literacy. Entrepreneurial skills are important to improve HSM and owners’ digital and financial literacy. The government and other parties need to provide more soft loans and facilitate MSMEs to develop entrepreneurial skills, digital and financial literacy to improve business sustainability during the pandemic.

MSMEs play a significant role in the digital economy, highlighting the need for the government to focus on their development beyond financing, and to improve their digital literacy. This study investigates the impact of Digital Financial Literacy on the Financial Performance of MSMEs in Pancer Puger Beach, Jember, with a specific focus on the role of Financial Behavior in promoting this relationship. The study uses mixed method with an exploratory sequential design, combining qualitative data gathered from focus group discussions, in-depth interviews, and observations, with quantitative data collected through questionnaires from 120 MSMEs respondents obtained via snowball sampling which analyzed using the Partial Least Square. The result shows that (1) Digital Financial Literacy affects Financial Performance, (2) Digital Financial Literacy affects Financial Behavior, and (3) Financial Behavior affects Financial Performance of MSMEs while Financial Behavior serves as a mediator between Financial Literacy and Financial Performance. The findings suggest that tourism MSMEs can adapt and thrive in line with Indonesia's digital financialization.JEL: G41, L26, L83.

Manufacturing firms face increasing pressure to strengthen data integration and coordinate activities as digital technologies become embedded in business processes. Although digital literacy, supply chain integration, transparency, and digital orientation are recognized as essential capabilities, limited research has examined their combined effects on firm performance in emerging-market contexts. This study investigates the interrelationships among these capabilities by surveying 220 manufacturing companies across Java and analyzing the data using SmartPLS 4. The results show that digital literacy significantly enhances supply chain integration and supply chain transparency, although it does not directly influence digital orientation. Supply chain integration positively affects supply chain transparency, digital orientation, and firm performance. Supply chain transparency improves digital orientation but has no direct effect on firm performance. Digital orientation is found to be a strong predictor of firm performance. These findings highlight a sequential capability pathway in which digital literacy and supply chain capabilities shape digital orientation, which in turn drives firm performance. The study offers practical guidance for manufacturing firms seeking strengthening digitalization strategies through targeted development of employee digital skills, integrated information systems, and transparent supply chain processes.

The rising tide of women entrepreneurship, the unparalleled rise in fintech, and the inclusive nature of digital technologies led to the democratization of entrepreneurship, challenging structural constraints ascribed to gender-specific roles. The democratization underscores the economic implications of women entrepreneurs’ digital engagement in response to global digital by default. Hence, through the social cognitive theory, the study examines whether leveraging Digital Financial Literacy ensures Financial Inclusion for women entrepreneurs, unveiling the potential of digital engagement in bridging the entrepreneurial-gendered financing gap, which has been explored less. A primary survey of 214 women entrepreneurs was analysed using Hayes PROCESS macro-model 8. The findings reveal that Digital Financial Literacy significantly influences Financial Inclusion and Firm Performance. Financial Inclusion partially mediates the relationship between Digital Financial Literacy and Firm Performance. However, Financial Behaviour negatively moderates the relationship between Digital Financial Literacy and Firm Performance and remains insignificant between Digital Financial Literacy and the Financial Inclusion link. Hence, the study offers insights to entrepreneurs, policymakers, and academicians on the potential of Digital Financial Literacy in narrowing the gender finance gap. It also emphasizes the need to improve the financial behavior of women entrepreneurs.

This research aimed to examine the effects of financial and digital literacy as a fundamental aspect that influence the decision in making digital investment which is mediated by perceived socio- economic status. Prior research of how socio-economic affects digital and financial literacy which influence investment decision making process has widely been discussed over the time. However, most studies were focused on ‘objective’ socio-economic status as a part of a measurable factor which affects literacy level. On the other hand, there is another key element that needs to be deepened further, that is ‘perceived’ socio- economic status. In addition, specific discussion on ‘digital’ investment decisions and how it is influenced by the perception of digital investors which correlated with digital and financial literacy factors are also still limited. The trend of digital investors has risen along with the growing financial technology market, especially for millennials. This study’s results will contribute to policy makers, digital investors, and especially for digital investment companies to formulate go-to-market strategy. This research used a convenient sampling and gathered data through an online questionnaire survey from 116 individual investors. Multiple regression using SmartPLS version 4.0 was applied to analyze the data and test the research model. The results show that financial literacy and digital literacy positively affects digital investment decision throughout perceived socio-economic status as a mediator that also has a positive impact to digital investment decision.

PurposeGrounded in upper echelon (UE) theory, this study aims to examine the role of managerial competencies (business experience, financial literacy and digital literacy) in sustainable development strategy, with resource management as a mediator.Design/methodology/approachThe empirical data collection is conducted through a survey completed by 297 top management teams of small and medium-sized enterprises (SMEs) operating in Pakistan. Structural equation modelling in Smart PLS is used to substantiate the hypotheses.FindingsThe findings reveal that financially and digitally literate managers significantly contribute to the sustainable development strategies of SMEs. However, experienced managers do not focus significantly on sustainable development strategies. Resource management partially mediates the nexus between financial literacy and sustainable development strategy, as well as between digital literacy and sustainable development strategy. In contrast, resource management does not mediate the nexus between business experience and sustainable development strategy.Research limitations/implicationsThis study recommends that SMEs should prioritize managers with digital and financial literacy over those with experience. SMEs led by a management team with digital and financial literacy are more effective in resource management for sustainable development practices, whereas experienced managers may not significantly prioritize managing resources for sustainability.Originality/valueWhile research based on the UE theory significantly contributes to the body of knowledge on sustainable development, the role of managerial competencies, particularly business experience, financial literacy and digital literacy, in sustainable development strategy via resource management is neglected. This research fills this gap in the context of UE theory and thereby enriches the literature.

This study aims to analyze the relationship between digital literacy and financial literacy in strengthening a resilient and inclusive national financial ecosystem in Indonesia. As the financial landscape increasingly shifts toward digitalization, the integration of technological competence and financial awareness becomes a critical factor in ensuring economic stability and inclusive growth. Using a quantitative research approach, data were collected from 200 active users of digital financial services through a structured questionnaire. The data were analyzed using the Partial Least Squares–Structural Equation Modeling (PLS-SEM) method to test the validity, reliability, and causal relationships among variables. The results reveal that both digital literacy and financial literacy have a positive and significant influence on the development of a robust and inclusive financial ecosystem. Furthermore, the interaction between these two literacies strengthens individuals’ ability to make informed financial decisions, utilize digital platforms effectively, and contribute to financial inclusion. The findings highlight that the synergy between digital and financial literacy is essential for creating a sustainable financial system capable of adapting to technological disruption and economic uncertainty. This study contributes theoretically by integrating digital literacy into financial inclusion models, and practically by emphasizing the importance of joint initiatives among government, financial institutions, and educational organizations in promoting literacy-based empowerment. In conclusion, enhancing digital and financial literacy simultaneously is a strategic step toward building an inclusive, secure, and resilient financial ecosystem in the digital era.

As financial technologies rapidly expand in developing countries like India, digital financial literacy plays a critical role in shaping how individuals interact with innovative financial services. This study evaluates the influence of financial literacy, digital literacy, and digital financial literacy on the adoption of Peer-to-Peer lending platforms. It also explores the distinct roles and interrelationships among these forms of literacy within the Peer-to-Peer lending ecosystem. Data were collected from 430 participants, exceeding the minimum sample size requirement calculated through G*Power. Participants, comprising borrowers and lenders, actively interacted on Peer-to-Peer lending platforms in cities like Delhi, Mumbai, Hyderabad, Bangalore, and Chennai, ensuring a holistic understanding of the ecosystem. Borrowers are individuals seeking financial assistance, while lenders provide funds, often in exchange for interest-based returns. Using Partial Least Squares Structural Equation Modeling (PLS-SEM), the study reveals that while financial literacy and digital literacy significantly contribute to digital financial literacy, they do not directly impact the behavioral intention to adopt Peer-to-Peer lending platforms. Instead, digital financial literacy directly influences adoption intention, highlighting the importance of integrated literacy over isolated skills. The findings underscore the high proficiency levels of existing users in financial, digital, and digital financial literacy, reflecting the platforms’ appeal to skilled individuals. Expanding access to less proficient populations remains crucial. Moreover, platform managers can capitalize on user expertise by introducing advanced features tailored to sophisticated needs, thereby enhancing satisfaction and the overall user experience. These insights emphasize digital financial literacy’s pivotal role in fostering broader Peer-to-Peer lending adoption. AcknowledgmentsThe first author thanks the Ministry of Education, Government of India, for providing financial assistance (fellowship) during her Ph.D.

Building Financial Resilience Through Financial and Digital Literacy in South Asia and Sub-Saharan Africa

Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa

Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia

Financial management behavior is crucial for students, particularly as they engage with evolving financial technologies. However, there is a limited understanding of how financial technology and financial literacy interact to shape financial behavior, especially when considering digital literacy as a moderating factor. This study addresses this knowledge gap by examining the roles of financial technology and financial literacy on students' financial management behavior, with digital literacy as a potential moderator. Using a quantitative research method, primary data were gathered through a questionnaire survey from a sample of 114 accounting students at Muhammadiyah University of Sidoarjo, class of 2020. The findings indicate a positive relationship between financial technology and financial literacy on financial management behavior. Furthermore, digital literacy was found to moderate the effect of financial technology, strengthening its influence on students' financial management behavior. However, digital literacy did not moderate the influence of financial literacy on financial management behavior. The novelty of this research lies in its exploration of digital literacy's role as a moderating variable. Implications suggest the importance of incorporating digital literacy into financial education programs to enhance students' financial management practices. Highlights: Positive Relationship: Financial technology and literacy improve students' financial management behavior. Moderating Role: Digital literacy strengthens the effect of financial technology on financial behavior. No Moderation: Digital literacy does not moderate the impact of financial literacy on behavior. Keywords: Financial Technology, Financial Literacy, Digital Literacy, Financial Management, Student Behavior

Achievement of sustainable competitive position and superior performance is the first priority of business organizations. However, small firms, due to fairly known reasons; lack of resources, financial capabilities and lack of managerial skills are often unable to succeed in their mission. Hence, they often look for less risky and convenience sources to compete in the market. A variety of factors has been tested towards a firm competitive position and performance but the role of government support in this perspective has received minor attention. The present study examines the influence of government financial support and nonfinancial support on firm performance with mediating role of the sustainable competitive position. Hypotheses were tested using structural equation modeling in Analysis Moment of Structure (AMOS) on a data set of 326 Pakistani Small and Medium Size Enterprises (SMEs). The results indicate that government financial and nonfinancial support have a significant influence on sustainable competitive position and firm performance. Additionally, a sustainable competitive position partially mediates the relationship between government support and firm performance. Government bodies and policy makers are advised to provide financial and nonfinancial support to SMEs which in turn can upsurge economic growth and sustainability.