Business sustainability: Functions of financial behavior, technology, and knowledge

  • Received November 30, 2022;
    Accepted January 12, 2023;
    Published January 30, 2023
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/ppm.21(1).2023.11
  • Article Info
    Volume 21 2023, Issue #1, pp. 120-130
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This work is licensed under a Creative Commons Attribution 4.0 International License

Micro, small, and medium-sized enterprises (MSMEs) are among the cornerstones of the Indonesian economy that managed to survive the world crisis. The development of MSMEs also demands that owners be ready to compete with other MSMEs. This study aims to analyze whether business sustainability is influenced by financial literacy with financial behavior and financial technology as mediators. The research sample includes owners and managers of MSMEs in Indonesia, totaling 342 respondents. Data collection methods used are non-probability sampling techniques by distributing questionnaires. This study uses SEM analysis with PLS analysis tools. It was found that financial literacy does not directly affect business sustainability but affects financial behavior and financial technology. Financial behavior and financial technology are proven to influence business sustainability. Furthermore, financial behavior and financial technology mediate the effect of financial literacy on business sustainability. The results of this study show that financial behavior and financial technology can fully mediate the relationship between financial literacy and business sustainability. Moreover, financial literacy cannot directly affect business sustainability, which must be fully mediated by financial behavior and financial technology. This study also provides practical value regarding the sustainability of MSMEs. Thus, companies can survive in the long term not only with a robust financial literacy foundation but they must be supported by good financial behavior and also be able to choose the right financial technology in their business activities.

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    • Figure 1. Conceptual framework
    • Figure 2. PLS algorithm processing results
    • Table 1. Respondent demographics
    • Table 2. Convergent validity
    • Table 3. Reliability test
    • Table 4. Outer loading of financial literacy
    • Table 5. Outer loading of financial behavior
    • Table 6. Outer loading of financial technology
    • Table 7. Outer loading of business sustainability
    • Table 8. Direct and indirect impact
    • Conceptualization
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Data curation
      Bambang Widagdo
    • Investigation
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Methodology
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Project administration
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Resources
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Validation
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Writing – original draft
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Writing – review & editing
      Bambang Widagdo, Chalimatuz Sa’diyah
    • Formal Analysis
      Chalimatuz Sa’diyah
    • Supervision
      Chalimatuz Sa’diyah