Digital Technology Adoption and Financial Literacy: The Moderating Role of Entrepreneurial Proactivity in MSME Performance

Abstract

This study examines the effects of digital technology adoption and financial literacy on MSME performance, with Proactive Entrepreneurial Behavior (PEB) as a moderating variable. Using a quantitative approach, data were collected from 98 MSME respondents and analyzed using PLS-SEM with SmartPLS 4.0. The results show that digital technology adoption does not significantly affect MSME performance (β = 0.110, p = 0.444), while PEB (β = 0.156, p = 0.048) and financial literacy (β = 0.147, p < 0.001) have significant positive effects. PEB does not significantly moderate the relationship between digital technology adoption and MSME performance (β = 0.097, p = 0.058), but significantly moderates the relationship between financial literacy and MSME performance (β = 0.098, p = 0.005). These findings highlight the importance of financial literacy and proactive entrepreneurial behavior in improving MSME performance.