The mediating role of Market Orientation in the relationship between marketing capability and social capital on innovation performance

Micro, Small, and Medium Enterprises (MSMEs) are critical drivers of economic growth and innovation, particularly in emerging economies like Indonesia. However, they face persistent challenges such as limited resources, low innovation capacity, and growing pressure to meet environmental sustainability standards. This study investigates the impact of circular economy (CE) practices—specifically resource utilization and innovation & learning—on the business and socio-environmental performance of MSMEs in Padang City, Indonesia. Drawing upon the Natural Resource-Based View (NRBV), the study posits that sustainable resource management and organizational learning can serve as strategic capabilities for long-term competitive advantage. A quantitative approach using Structural Equation Modeling–Partial Least Squares (SEM-PLS) was employed, with data collected from 70 MSMEs via an online questionnaire. The results reveal that both resource utilization and innovation & learning significantly and positively affect business success and social-environmental performance. These findings underscore the importance of integrating sustainability-oriented innovations and resource efficiency into MSME operations. The study contributes to the limited empirical research linking NRBV and CE practices within MSMEs in emerging markets. It offers practical implications for policy-makers and business development programs aiming to foster sustainable competitiveness and inclusive growth through innovation and environmental stewardship in the MSME sector.

Background - Micro, Small, and Medium Enterprises (MSMEs) are crucial for driving Indonesia's economic growth. However, their sustainability often faces challenges due to limited access to financial resources and minimal use of financial technology. Many MSMEs also exhibit low financial literacy, which impacts their ability to manage their finances efficiently and utilize digital financial instruments. In an increasingly complex and competitive market landscape, the ability of MSMEs to obtain funding and utilize financial technology is crucial for achieving sustainable growth. Objective - This study aims to examine the mediating effect of access to finance on the relationship between financial literacy and financial technology on the sustainability of MSMEs. This study specifically examines whether financial literacy and financial technology can have a significant impact on the sustainability of MSMEs, both directly and indirectly through access to finance as a mediating factor. Design/Methodology/Approach - This study employed a quantitative methodology using a questionnaire to collect data from 150 MSME participants in Batam City. The sampling technique used was purposive sampling, specifically aimed at financial technology users. Data were collected through Structural Equation Modeling–Partial Least Squares (SEM-PLS) using SmartPLS software. This model combines reliability, validity, and significance assessments through bootstrapping to evaluate direct and indirect influences between variables. Find - The findings of this study indicate that financial technology significantly influences the sustainability of MSMEs, both through direct connections and through a mediation process through access to finance. Access to finance has been shown to significantly influence the sustainability of MSMEs. Conversely, financial literacy does not show a significant direct impact on sustainability, nor does it have a significant indirect effect through access to finance. These findings emphasize that the influence of financial technology is greater than financial literacy in increasing the competitiveness and sustainability of MSMEs in today's digital era. Conclusion - The conclusion obtained in this study is that financial literacy does not have a significant direct influence on the sustainability of MSMEs. In contrast, financial technology and access to finance have a significant positive influence on the sustainability of MSMEs. Access to finance mediates the relationship between financial technology and MSME sustainability, but access to finance does not mediate the relationship between financial literacy and MSME sustainability. This finding confirms the importance of adopting financial technology in strengthening the sustainability of MSMEs. Research Implications - The findings of this study provide important insights for various parties, particularly the government, financial institutions, and business support service providers. They need to be more proactive in encouraging the use of financial technology among MSMEs to support business closures. Furthermore, financial literacy programs need to be designed with a more applicable approach and be relevant to the needs of MSMEs, particularly those related to the use of digital financial services, so that their benefits are truly felt in daily business practices. Limitations - This study has several limitations. It is geographically confined to Batam City, limiting the generalizability of its findings to other regions in Indonesia. Furthermore, as a purely quantitative study, it does not explore in-depth behavioral or socio-psychological factors that may influence MSME sustainability. Future research is recommended to employ a mixed-methods approach and expand the scope to other regions to gain more comprehensive insights.

This study investigates the impact of managerial competence, innovation, and market orientation on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Using a quantitative approach, data were collected from 220 MSMEs and analyzed through Structural Equation Modeling-Partial Least Squares (SEM-PLS). The findings reveal that all three constructs significantly and positively influence MSME performance, with managerial competence demonstrating the strongest effect. Innovation fosters adaptability and competitive advantage, while market orientation enhances customer focus and market responsiveness. The results underscore the importance of strategic leadership, innovative practices, and a market-driven approach in improving MSME performance. These insights provide practical recommendations for MSME stakeholders and policymakers to drive sustainable growth and competitiveness in the sector.

This study aims to analyze the influence of sound system event attendance and visit intensity on the increase in income of Micro, Small, and Medium Enterprises (MSMEs) in Padomasan Village. This research employs a quantitative approach using a survey method, with data analysis conducted through the Structural Equation Modeling–Partial Least Squares (SEM-PLS) technique using SmartPLS software. Data were collected through questionnaires distributed to several MSME respondents in Padomasan Village. The results of this study indicate that both the presence of sound system events and the intensity of visits have a positive and significant influence on the increase in MSME income in Padomasan Village. Sound system events can serve as a major attraction for visitors, increasing the number of buyers and thereby having a positive impact on MSME income. In addition, a high level of visit intensity also contributes to the growth of MSME product sales. The presence of sound system events and the frequency of visits are important factors that need to be considered in efforts to increase the income of MSMEs in Padomasan Village.

The innovation of electronic tax return reporting through e-filing aims to improve taxpayer compliance. However, in practice, the implementation of e-filing has not been effective, mainly due to various obstacles such as a lack of taxpayer knowledge, low digital literacy, and minimal socialisation regarding the use of e-filing. In addition, the implementation of e-filing is not yet fully automated (full automation). This phenomenon is also felt by Micro, Small, and Medium Enterprises (MSMEs) in the Greater Solo area. Therefore, this study aims to analyse the effect of the effectiveness of e-filing implementation on tax compliance among MSMEs in Solo. The population in this study consisted of 11,157 MSMEs, with a sample of 386 MSMEs obtained using the Slovin formula. The data used are primary data collected through the distribution of questionnaires. Data analysis techniques use the Structural Equation Modelling–Partial Least Square (SEM-PLS) method with the assistance of SmartPLS version 3 software. The analysis results show that the effectiveness of e-filing implementation has a positive and significant effect on MSME tax compliance in Solo Raya.

The strategic development of Micro, Small, and Medium Enterprises (MSMEs) and government spending are pivotal drivers of local productivity and regional economic growth. However, existing empirical investigations often lack an integrated framework linking these crucial factors. This study addresses that gap by analyzing the influence of MSME growth and government spending on local sector productivity and their subsequent implications for economic growth dynamics in Lampung Province, Indonesia. Adopting a quantitative survey design, this research collected primary data from 190 purposively selected respondents, comprising MSME actors and government officials across key economic sectors. Supporting secondary data was also utilized. The study employed Structural Equation Modeling–Partial Least Squares (SEM-PLS) to test seven hypotheses. The findings unequivocally demonstrate that MSME growth and government spending significantly influence the dynamic of economic growth and local sector productivity. Moreover, local sector productivity also significantly influences economic growth. Last but not least, both MSME growth and government spending have significant indirect influences on economic growth through local sector productivity. This study advances the understanding of the causal mechanisms linking fiscal policy and MSME dynamics within regional development frameworks. It further emphasizes the critical importance of synergy between local governments and MSME stakeholders to ensure inclusive and sustainable economic growth. Future research is encouraged to explore sector-specific policy impacts through longitudinal and mixed-method approaches for more profound insights.

This study aims to examine the direct effect of financial literacy and sustainability on micro, small, and medium enterprises (MSMEs) in Mataram, Indonesia. The study also analyzes the mediating effect of access to finance and financial risk attitude on the relationship between financial literacy and sustainability in MSMEs in Mataram, Indonesia, supported by the Resource-Based View (RBV), Knowledge-Based View (KBV), Pecking Order Theory, and Dual Process Theory. In addition, this study uses a descriptive quantitative methodology, where questionnaires were distributed to MSME practitioners in Mataram, and the data were analyzed using Structural Equation Model Partial Least Square (SEM-PLS). The findings indicate a positive relationship between financial literacy, access to finance, and financial risk attitude towards sustainability in MSMEs in Mataram. Furthermore, there is a significant effect of access to finance and financial risk attitude as mediators in the relationship between financial literacy and sustainability. Therefore, this study provides valuable insights for MSME practitioners to improve their financial knowledge and skills to support business growth and sustainability.

Micro, Small, and Medium Enterprises (MSMEs) are central to Indonesia’s economy, contributing more than 60% of GDP and employing the majority of the workforce. In East Java, MSMEs account for nearly 59% of regional GDP, underscoring their critical role in inclusive growth. Despite this importance, MSMEs face persistent challenges, including limited access to credit, low digital adoption, weak innovation, and vulnerability to competition. While prior studies have explored these factors separately, few have developed an integrative framework linking business strategies, competition, and regulation to sustainability. This study examines the effects of seven strategic dimensions, credit facilities, digital marketing, innovation, pricing, distribution, circular economy, and inclusive partnerships, on MSME sustainability. Business competition is tested as a mediating variable and regulation by the Indonesian Competition Commission (KPPU) as a moderating variable. Data were collected from 396 MSMEs across handicrafts, food and beverage, and service sectors, and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). Results show that digital marketing, innovation, pricing, distribution, and inclusive partnerships significantly enhance sustainability, while credit facilities and circular economy practices have limited direct impact. Competition mediates the effects of strategies on sustainability, and regulation strengthens both strategic and competitive impacts. The study contributes theoretically by integrating Resource-Based View, Competitive Advantage, Institutional Theory, and Circular Economy perspectives into a holistic model, and provides practical insights for policymakers and MSME actors seeking to enhance resilience and long-term sustainability.

This study investigates the influence of contextual Environmental, Social, and Governance (ESG) reporting and green supply chain accounting on cost efficiency and credit assessment of Micro, Small, and Medium Enterprises (MSMEs) in West Java. Using a quantitative research design, data were collected from 250 MSME respondents through structured questionnaires and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS) 3. The findings indicate that contextual ESG reporting and green supply chain accounting significantly enhance cost efficiency by reducing operational waste and optimizing resource use. Both variables also positively influence credit assessment, reflecting the growing recognition by financial institutions of sustainable business practices as indicators of financial credibility and resilience. These results highlight the dual benefits of sustainability practices, providing MSMEs with internal efficiency gains and external access to financing opportunities. The study contributes to the literature by emphasizing the relevance of ESG and green supply chain practices for MSMEs in emerging economies, offering both theoretical insights and practical implications for policymakers, business owners, and financial institutions in supporting sustainable economic development.

Technology challenges for Micro, Small, and Medium Enterprises (MSMEs) are constantly changing. Specifically, this research aims to examine how using digital payments affects the performance of MSME traders in Bekasi's food and beverage industry. The study used quantitative methodology and data processing using Structural Equation Modeling-Partial Least Squares (SEM-PLS) and involved 117 MSME respondents in Bekasi as samples. The results of this study highlight how MSMEs' performance in Bekasi is significantly impacted by their use of digital payment systems. The study shows that MSMEs may maximize the benefits of digital payments if they demonstrate an openness to learning and an acceptance of new technical advancements. Furthermore, as critical components for MSMEs' success in the digital age, the study highlights the vital roles that technology innovation adaptation and training play. MSMEs in the food and beverage industry may improve operational efficiency and competitiveness by identifying and utilizing new technology. This research is limited to certain locations and variables, so further studies are needed with a broader scope and additional variables, such as the role of Pentahelix in developing MSMEs. The implications of this research that can be applied are that adopting technology increases the efficiency, competitiveness, and growth of MSMEs through digitalization and collaboration. Therefore, this research highlights the significance of a proactive strategy for technology integration and ongoing education in enabling MSMEs to prosper in the ever-changing digital ecosystem.

This study examines the influence of local wisdom on green competitive advantage in micro, small, and medium enterprises (MSMEs) within the batik industry in East Java, Indonesia. It also investigates the mediating role of green innovation in linking local wisdom and green competitive advantage. A purposive sampling method was used, resulting in 79 batik MSMEs selected as study objects, with 122 respondents consisting of MSME owners and/or managers. Data were analyzed using the Structural Equation Modeling–Partial Least Squares (SEM-PLS) method. The findings show that local wisdom positively influences green product innovation, green process innovation, and green competitive advantage. Notably, green process innovation plays a significant role in enhancing green competitive advantage, while green product innovation does not demonstrate a similar impact. Furthermore, green process innovation mediates the relationship between local wisdom and green competitive advantage, whereas green product innovation does not. The study highlights the importance of integrating local wisdom into sustainable business practices to strengthen competitiveness. It also emphasizes the need for targeted strategies to overcome barriers such as financial limitations, underdeveloped green markets, and limited government support. Enhancing education and training for MSME owners, alongside increasing consumer awareness of green products, should be prioritized for future development.

This study aims to investigate the adoption of Artificial Intelligence (AI) by Micro, Small, and Medium Enterprises (MSMEs) in Indonesia, integrating the Technology Acceptance Model (TAM) and the Unified Theory of Acceptance and Use of Technology (UTAUT). The research examines explicitly how adoption determinants influence Behavioral Intention (BI) and how BI, in turn, drives business performance across key functional areas—marketing, human resources, finance, and operations. A quantitative research design was employed using a cross-sectional survey of 460 MSME owners, managers, and employees from various sectors. Structural Equation Modeling–Partial Least Squares (SEM-PLS) with SmartPLS 4.0 was applied to test the proposed model. Constructs were adapted from established TAM–UTAUT scales and extended with business performance measures. The results confirm that Performance Expectancy, Effort Expectancy, and Facilitating Conditions significantly influence BI, whereas Social Influence does not significantly shape adoption intention. Moreover, BI exerts a significant positive effect on marketing, human resources, financial, and operational performance, and mediates the relationship between adoption determinants and business outcomes. This study extends the TAM–UTAUT framework by empirically linking AI adoption determinants to functional business performance in MSMEs, particularly in a developing economy. The findings highlight the critical role of BI as a mediating mechanism, underscoring that adoption decisions are driven more by perceived value and ease of use than by external social pressures.

Experiential marketing and store atmosphere are two key factors that can greatly influence customer loyalty through customer satisfaction as a mediating factor. These factors can impact a customer’s perception of a brand and their likelihood of returning to make additional purchases. The research explored the relationship between experiential marketing, store atmosphere, customer satisfaction, and customer loyalty, as well as the strategies that businesses could use to enhance these factors and improve customer loyalty. The research focused on Micro, Small and Medium Enterprises (MSMEs) in West Java, Indonesia, which owned physical stores. The research applied causal quantitative methodology. Through a thorough analysis of existing research and empirical research of 384 respondents using Structural Equation Model Partial Least Square (SEM-PLS) methodology, the research provided valuable insights for MSMEs looking to increase customer loyalty and build a loyal customer base. The results show various contributions analyzing how customer loyalty is affected by experiential marketing and store atmosphere. It also implies how customer satisfaction mediates the relationships between those antecedents and customer loyalty. Providing recommendations and implications shows that the research can be a useful contribution to marketing and entrepreneurship topics. The research offers practical recommendations and implications for businesses, emphasizing the importance of implementing effective experiential marketing strategies and creating a welcoming store atmosphere to foster customer satisfaction and loyalty. By understanding the impact of these factors on customer loyalty, MSMEs can develop targeted strategies to improve customer experiences and build long-term customer relationships.

SMEs (Small and Medium Enterprises) serve as the backbone of the Indonesian economy, in a country with the world's largest Muslim population. Therefore, further analysis is needed regarding the factors influencing the performance of SMEs in an effort to maximize the country's revenue. This research aims to examine the relationship between religiosity, financial literacy, and Islamic financial planning on the performance of Micro, Small, and Medium Enterprises (MSMEs) in the Greater Jakarta area (Jabodetabek). This study employs a quantitative approach using the Structural Equation Model Partial Least Square (SEM-PLS) with primary data collected through an online purposive sampling technique from 113 MSMEs in Jabodetabek. The performance of MSMEs is significantly influenced by religiosity, Sharia financial literacy, and Islamic financial planning. Religiosity has a significant impact on Sharia financial literacy and Islamic financial planning. Sharia financial literacy affects Islamic financial planning significantly.

This research investigates the impact of green intellectual capital, dynamic capability, IT ambidexterity, environmental uncertainty, and RICH on the innovation performance of entrepreneurial small and medium-sized enterprises (SMEs). Focusing on Indonesian e-business SMEs, this study aims to deepen comprehension of the elements fostering innovation within SME entrepreneurship. Data were gathered from 313 SME entrepreneurs via online questionnaires and analyzed using Structural Equation Modeling-Partial Least Squares (SEM-PLS). The study identifies key determinants influencing the improvement of innovation performance among Indonesian ebusiness SMEs and offers recommendations for its enhancement. Findings indicate that IT ambidexterity, environmental uncertainty, RICH, and green intellectual capital exert a significant positive effect on dynamic capability. Furthermore, dynamic capability, IT ambidexterity, environmental uncertainty, RICH, and green intellectual capital all demonstrate a substantial positive influence on innovation performance, with green intellectual capital emerging as the most impactful contributor. Ultimately, these insights can empower businesses to develop novel products and implement innovative marketing strategies, thereby expanding their market reach and customer base.