Transforming Financial Literacy into Business Performance: The Dual Parallel Mediating Roles of Financial Management Capability and Digital Capability in Coffee Shop MSMEs

Abstract

Amid growing competition in the culinary sector, how financial literacy translates into business performance remains a critical research gap. Grounded in the Resource-Based View (RBV) and Dynamic Capability Theory (DCT), this study investigates the parallel mediating roles of Financial Management Capability and Digital Capability between Financial Literacy and MSME Performance among coffee shop MSMEs in Bekasi City. A quantitative explanatory research design was applied to a sample of 120 owner-managers selected via purposive sampling based on operational longevity and digital payment adoption. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 4. The empirical results demonstrate that Financial Literacy has no direct significant effect on MSME Performance. However, Financial Literacy strongly enhances both Financial Management Capability and Digital Capability, which in turn significantly improve MSME Performance, confirming a full parallel mediation mechanism. The study’s novelty lies in empirically proving within an integrated RBV-DCT framework that intangible financial knowledge yields a sustained competitive advantage only when converted into concrete operational managerial routines and digital capabilities.