The Mediating Roles of Digitalization and Financial Literacy in Capability – Financial Performance for SME

Abstract

Purpose: This study analyze one of the main factors in efforts to create businesses and improve the sustainable performance of SMEs is that mastery of technology is also very necessary to support these efforts. The ability of business actors to go digital is one of the government's programs which was initially a response to the Covid-19 pandemic conditions since 2019 and was continued as a program to accelerate catching up with SMEs in other Asian countries.
 
 Theorethical Framework: This study involves 5 hypotheses that are described comprehensively in section. The independent variables are Capability (C), Moderating Variables are Financial Literacy (FL) and Digital Literacy (DL), and the Dependent variable is Financial Performance (BP).
 
 Method: Furthermore, the total sample in this study involved 100 respondents, data were collected using online surveys, and the method of analysis used was AMOS.
 
 Results and Conclusion: This ability is also supported by financial literacy skills. The aim of this research is to find out whether SME organizational capabilities can influence SME performance. To find out the capabilities of SME organizations here, it is necessary to create an innovative business model. The innovative business model built here is through financial literacy and digitalization.
 
 Originality/Value: This study in testing the relationship between variables is based on two theoretical approaches: RBV and TAM. Besides, measuring variables by moderation uses Financial Literacy anf Digital Literacy.