Fintech Impact MSME Financial Performance Mediated by Digitalization and Moderated by Sustainability Practices
DOI:
https://doi.org/10.55587/jla.v6i3.397Keywords:
Fintech, Business Digitalization, Sustainability, Financial Performance, MSMEsAbstract
Purpose: This study investigates the impact of financial technology (fintech) adoption on the financial performance of Micro, Small, and Medium Enterprises in Yogyakarta, Indonesia. Specifically, it examines the mediating role of business digitalization and the moderating influence of sustainability practices on this relationship.
Method: Employing a quantitative research design, primary data were gathered via structured questionnaires from 155 MSME owners and managers in Yogyakarta who utilize fintech in their business operations. The data were analyzed using Partial Least Squares Structural Equation Modeling via SmartPLS, encompassing measurement model assessment, structural model evaluation, and hypothesis testing.
Finding: The results demonstrate that fintech adoption exerts a positive and statistically significant influence on both business digitalization and MSME financial performance. Furthermore, business digitalization is positively and significantly associated with improved financial performance, serving as a partial mediator in the relationship between fintech utilization and financial performance. Additionally, sustainability practices significantly moderate this relationship, specifically attenuating the positive effect of business digitalization on MSME financial performance.
Novelty: The novelty of this research lies in the integration of business digitalization as a mediator and sustainability as a moderator within a comprehensive model, providing nuanced insights into the dynamics of fintech adoption and financial performance within the MSME sector in Yogyakarta.
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