The Influence of Digital Literacy, Entrepreneurial Orientation, and Product Innovation on MSME Business Performance

Vikky Alziqri JH; Ridwan Ridwan; Diah Hari Suryaningrum; Nian Riawati; Yaen Miftakhul Laily

doi:10.63922/ijebir.v5i06.7137

Vikky Alziqri JH UIN Walisongo Semarang
Ridwan Ridwan Universitas Muhammadiyah Enrekang
Diah Hari Suryaningrum Universitas Pembangunan Nasional Veteran Jawa Timur
Nian Riawati Universitas Jember
Yaen Miftakhul Laily Universitas Jember

DOI: https://doi.org/10.63922/ijebir.v5i06.7137

Keywords: Digital Literacy, Entrepreneurial Orientation, Product Innovation, MSME Business Performance

Abstract

Micro, Small, and Medium Enterprises (MSMEs) face increasingly competitive business environments, necessitating digital capabilities, an entrepreneurial orientation, and product innovation to sustain and enhance their business performance. This study aims to analyze the impact of digital literacy, entrepreneurial orientation, and product innovation on the business performance of MSMEs. Employing a quantitative approach with an explanatory research design, the study involved 170 MSME owners/managers selected through purposive sampling. Data were collected via a 1–5 Likert-scale questionnaire—administered both online and offline—and subsequently analyzed using multiple linear regression with the aid of SPSS. The results indicate that digital literacy, entrepreneurial orientation, and product innovation have a positive and significant effect on MSME business performance. The coefficient of determination (R²) of 0.340 suggests that 34% of the variance in MSME business performance can be explained by digital literacy, entrepreneurial orientation, and product innovation, while the remaining 66% is attributed to other variables not included in this research model. The study concludes that improving MSME performance requires the ability to leverage digital technology, a proactive entrepreneurial orientation, and product innovation that aligns with consumer needs.

References

Aftitah, F. N., Labana, J., Hasanah, K., & Hadi, N. L. (2024). The Influence of MSMEs on Economic Growth in Indonesia in 2023. Journal of Management Science Studies and Reasoning, 3(1), 32–43. https://doi.org/10.59031/jkpim.v3i1.511
Agustina, A., Destiani, W., & Sari, M. L. (2025). An analysis of the implementation of entrepreneurial orientation and creativity in MSMEs in the fashion sector. . Proceedings of the National Conference on Community Service, 6, 524–533.
Agustina, R. W., Khasanah, E. F., Lana, K. B., Ajie, A. T., Rahmawati, F. (2026). Micro-Business Management Strategies to Increase Competitiveness in the Digital Era. Currency: Journal of Islamic Economics and Banking, 5(1), 376–393. https://doi.org/https://doi.org/10.32806/currency.v5i1.2015
Fachri, M. R., & Hendra, H. (2026). Marketing Strategy and Human Resource Competency Development in Improving the Performance of MSMEs in Tempe Manufacturing Factories on Gajah Mada Street, East Binjai District. El Rayyan Journal: Islamic Banking Journal, 5(2), 13-26. https://doi.org/https://doi.org/10.59342/jer.v5i2.1136
Febriana, A., Sukidin, S., Sholekhah, I., & Rachmawati, S. (2026). Analysis of Product Innovation at Graha Macarina Jember. MAMEN: Journal of Management, 5(3), 629–641. https://doi.org/10.55123/mamen.v5i3.8256
Hidayat, M. (2024). The Influence of Entrepreneurial Orientation and Technology Utilization on Business Sustainability Through Strategic Agility among MSMEs in Makassar City. Amkop Management Accounting Review (AMAR), 4(1), 76–90. https://doi.org/https://doi.org/10.37531/amar.v4i1.2592
Hidayat, M., Latief, F., Reyes, A. P. G., & Handaling, M. M. (2026). The Influence of Entrepreneurial Orientation and Product Innovation on MSME Business Performance in the Digital Era. Journal of Management, STIE Muhammadiyah Palopo, 12(1), 47-57. https://doi.org/10.35906/jurman.v12i1.2835
Lesmana, A. (2026). The Influence of Entrepreneurial Orientation and Digital Literacy on the Performance of Micro, Small, and Medium Enterprises (MSMEs). Cano Ekonomos Scientific Journal, 15(1), 15–24. http://journal.upp.ac.id/index.php/cano
Mahendrata, B., Kautsar, A., & Abbrori, N. H. H. (2026). The Influence of Digital Literacy and Entrepreneurial Orientation on the Performance of Surabaya MSMEs Through Innovation Capability. Journal of Business Management and Entrepreneurship, 10(1), 139–153. https://doi.org/10.24912/jmbk.v10i1.37237
Maulana, M. I., & Suyono, E. (2023). The Influence of Financial Literacy and Digital Literacy on the Business Sustainability of Sharia-Based MSMEs. Scientific Journal of Islamic Economics, 9(3), 4256-4271. https://doi.org/10.29040/jiei.v9i3.10856
Nugraha, S. A., Nandang, N., & Fauziyah, A. (2026). Digital Literacy Product Innovation and Entrepreneurial Orientation Predict SME Business Performance. Academia Open, 11(2), 2–5. https://doi.org/10.21070/acopen.11.2026.14179
Sekaran, U., & Bougie, R. (2016). Research Method for Business Textbook: A Skill Building Approach. In John Wiley & Sons Ltd.
Subawe, I., Nursaidah, N., & Tyas, W. M. (2026). The Influence of Digital Literacy, Financial Literacy, Product Innovation and Entrepreneurial Orientation on the Performance of Coffee MSMEs in Tanggul District, Jember Regency. Journal of Business Management and Accounting Studies, 1(1), 1–14.
Utami, S. F., Lestari, F. D., & Suparno, S. (2026). The Influence of Digital Literacy, Digital Capability, and Entrepreneurial Orientation on the Performance of Culinary MSMEs in West Jakarta. Ekopedia: Scientific Journal of Economics, 2(3), 6723-6740. https://doi.org/10.63822/a0mget37
Wediawati, B., Adriani, Z., Setiawati, R., Ratnawati, RTS., & Dewi, E. (2025). The Impact of Entrepreneurial, Financial, and Digital Literacy on MSME Performance. Scientific Journal of Unitary Management, 13(4), 2643–2658. https://doi.org/10.37641/jimkes.v13i4.3411
Wiyanti, S., Setyaningsih, T. A,, Aulia, A. S. R., Safira, E. N. S., Rahayu, I. P., & Aristawati, N. (2026). Analysis of Production Technology Implementation, Product Suitability to Market Demand, and Pricing Strategy in Kenzo Fashion Convection Business in Tegal Regency. Journal of Management and Innovation Entrepreneurship (JMIE), 3(4), 904–915. https://doi.org/10.70248/jmie.v3i4.4125
Wuisan, VY, Lapian, SLVHJ, & Karuntu, MM (2022). The influence of product innovation and digital marketing on the development of MSMEs in Kauditan District during the Covid-19 pandemic. EMBA Journal: Journal of Economics, Management, Business and Accounting Research, 10(4), 759–769. https://doi.org/10.35794/emba.v10i4.43857
Yolanda, C., & Hasanah, U. (2024). The Role of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia's Economic Development. Journal of Management and Business, 2(3), 170–186. https://doi.org/10.36490/jmdb.v2i3.1147