BRIDGING THE DIGITAL GAP: THE EFFECT OF DIGITAL TECHNOLOGY ADOPTION ON MSMES PERFORMANCE WITH DIGITAL MARKETING CAPABILITY AS A MEDIATOR

Abstract

This study aims to examine the effect of digital technology adoption on MSMES business performance with digital marketing capability as mediating variable. This study contributes to the existing literature by dproviding empirical evidence of the relationship between digital technology adoption and its effect on MSME performance using Resource Advantage Theory of Competition perspective.  Data were collected through online questionnaires from creative industry MSMEs  in Indonesia. The data were analyzed using the partial least squares-structural equation method technique  with Smart PLS 3.0. The results show that digital technology adoption have significant effect on MSMEs performance in the creative industry sector. In addition, digital marketing capability were found to mediate the relationship between digital adoption and MSMEs performance. These findings highlight the critical role of distinctive competencies as a keyj factor in leveraging digital technology adoption to improve MSMEs performance.