The Impact of the Digital Economy on SME Business Performance: The Moderating Role of Digital Capability and the Mediating Role of Value Creation
DOI:
https://doi.org/10.56532/mjbem.v5i1.178Keywords:
MSMEs, Digital capability , Value creation , Digital economy, Business performanceAbstract
This study investigates the impact of the digital economy on the performance of micro, small, and medium enterprises (MSMEs) in West Java, Indonesia, by integrating the roles of digital capabilities and value creation. This research develops and assesses a cohesive framework that links the digital economy, digital capacity, and value creation inside a singular structural model, unlike other studies that analyze these components independently. Analysis of survey data from 127 MSMEs employing structural equation modeling (SEM) reveals that digital competency does not influence the relationship between the digital economy and value creation. The Sobel test confirms that value creation fully mediates the impact of the digital economy on business success. This integration significantly demonstrates that the adoption of the digital economy enhances performance only when transformed into concrete value-creation processes—through value networking, business model enhancement, coopetition, and digital innovation—highlighting strategic pathways for MSMEs in evolving digital economies.
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