THE ROLE OF ENTREPRENEURSHIP ORIENTATION IN THE EFFECT OF DIGITAL MARKETING THROUGH SOCIAL MEDIA ON THE PERFORMANCE OF MICRO, SMALL, AND MEDIUM ENTERPRISES (MSMEs) IN INDONESIA

Abstract

This research contributes to formulating policies and programs related to MSMEs, especially digital marketing in Indonesia. This research examines the role of entrepreneurial orientation on the influence of digital marketing via social media on MSMEs in Indonesia. Although several studies have examined the relationship between the use of social media (Technology Acceptance Model, TAM) and company business performance, the existence of inconsistencies in previous research results opens up obstacles for this research to develop theory and strengthen weaknesses. Previous research, as well as complementing the growing digital marketing literature. This research involved 500 MSME owners in Indonesia, where an online survey of MSME owners was the data collection instrument. The data has been analysed using SEM (Structural Equation Modeling) via AMOS (Analysis of Moment Structure) software. Results showed that perceived ease of use positively affected attitudes towards using social media. The benefits of using social media and attitudes towards using social media have a positive effect on attitudes towards using social media. The use of social media has a positive impact on the performance of MSMEs. Then, entrepreneurial orientation has a positive effect on the performance of MSMEs. Furthermore, entrepreneurial orientation moderates the influence of social media use on MSME's performance, meaning that entrepreneurial orientation strengthens the influence of social media use on MSME's performance. The research implication is that it contributes to the TAM literature, where all tests support the TAM theory. Future research is encouraged to replicate the moderation model developed in this study as applicable to other countries and regions for better generalisation. Future research can add control variables such as age, education, and experience to the relationship between social media use and MSME performance. From a practical point of view, the government needs to intervene to improve the business performance of MSMEs. One of them is providing reliable and affordable internet connectivity, equal distribution of internet infrastructure, especially in rural and remote areas, providing digital literacy and training among business owners and employees. Then, MSME players must be oriented towards entrepreneurship by producing innovative new products and more modern marketing innovations digitally through social media.