Micro, Small, and Medium-Sized Enterprises (MSMEs) During The Post-Pandemic Economic Recovery Period: Literation, Innovation, Digitalization and Its Impact on Financial Performance Riska Nur Rosyidiana(a)- Widi Hidayat(b)
(a) Doctoral Program in Accounting, Faculty of Economic and Business, Airlangga University, Surabaya, Indonesia- Faculty of Vocational Studies, Airlangga University, Surabaya, Indonesia.
riska.nur.rosyidiana-2022[at]feb.unair.ac.id
(b)Department of Accounting, Faculty of Economic and Business, Airlangga University, Surabaya, Indonesia.
Abstract
Research aims: This study aims to examine how digitalization, literation, and innovation affect MSMEs financial performance.
Design/Methodology/Approach: This study^s population consisted of 86,820 MSMEs actors in Bojonegoro City, East Java Province. A survey was conducted with a sample of 35 business owners selected using a non-probability sampling technique. The application of partial least squares structural equations modelling was employed to examine the collected data and evaluate the validity of the proposed model.
Research findings: The results suggest that there is a positive and significant impact of innovation on the financial performance of MSMEs. The literacy level of business owners exerts a positive and significant effect on innovation. The impact of digitalization on innovation and financial performance is observed to be positive, but it lacks statistical significance.
Theoretical contribution/Originality: This study makes several noteworthy theoretical contributions to the understanding of the intricate dynamics within MSMEs during the post-pandemic economic recovery era. First and foremost, the findings underscore a significant and positive relationship between innovation and the financial performance of MSMEs, highlighting the pivotal role that innovative practices play in enhancing their economic outcomes. Furthermore, a unique dimension emerges as the study reveals the substantial impact of business owners^ literacy levels on fostering innovation within their enterprises, thus elucidating the importance of literacy as a catalyst for innovative activities. Additionally, while the study identifies a positive link between digitalization and both innovation and financial performance, the lack of statistical significance emphasizes the need for further exploration in this area.
Research limitation/Implications: This research is firmly situated within the context of Bojonegoro City.
