The influence of financial bootstrapping and digital transformation on financial performance: evidence from MSMEs in the culinary sector in Indonesia

Maria Rio Rita and Pambayun Kinasih Yekti Nastiti

Cogent Business & Management, 2024, vol. 11, issue 1, 2363415

Abstract: To reduce dependence on external funding, financial bootstrapping can be an alternative low-cost funding solution for MSMEs. Cost efficiency can also be achieved by carrying out digital transformation in business operational activities. Furthermore, cost efficiency will lead to improved financial performance of MSMEs. This research investigates the influence of financial bootstrapping and digital transformation on the financial performance of MSMEs. Data collection was carried out through a field survey involving several enumerators and 180 respondents. The respondents of this research were female MSME entrepreneurs in the culinary sector in Central Java Province, Indonesia. The data was analyzed using the Partial Least Squares-Structural Equation Modeling (PLS-SEM) method. The research results revealed that financial bootstrapping and digital transformation have a significant positive effect on the financial performance of MSMEs. Furthermore, this study offers recommendations to improve the financial performance of MSMEs. Entrepreneurs must be creative in utilizing cheap internal funding sources and willing to adopt digital technology to increase operational efficiency and customer satisfaction.Fieldsentrepreneurship and small firm management; business, management and accounting; entrepreneurial finance

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/23311975.2024.2363415 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:oabmxx:v:11:y:2024:i:1:p:2363415

Ordering information: This journal article can be ordered from
http://cogentoa.tandfonline.com/journal/OABM20

DOI: 10.1080/23311975.2024.2363415

Access Statistics for this article

Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar

More articles in Cogent Business & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().