Determinant of Digital Transformation on MSME Creative Industry: A Confirmatory Factor Analysis
DOI:
https://doi.org/10.61194/ijjm.v6i1.1422Keywords:
digital transformation, MSMEs, organizational factors, technology adoption, CFAAbstract
The latest study highlights the importance of the role of digital transformation in increasing the competitiveness of micro, small, and medium enterprises (MSMEs). However, the complex interaction between factors influencing digital adoption in MSMEs in the creative economy sector is still unresearched, especially in developing countries. This study aims to investigate the determinants of digital transformation adoption among MSMEs, focusing on the relative influence of organizational, technological, and environmental factors. We use a quantitative approach by conducting a survey of 254 MSME owners and managers. The data was analyzed using confirmatory factor analysis (CFA) to assess the relationship between variables. Our findings reveal that organizational factors exert the strongest influence on digital transformation adoption, followed by technology factors. Environmental factors, while significant, show a relatively lower impact. This study contributes to a more diverse understanding of digital transformation in MSMEs by emphasizing the excellence of the organization's internal capabilities. Our study shows that policies aimed at driving digital adoption should prioritize strengthening organizational readiness alongside technology support.
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Anatan, L., & Nur, N. (2023, May 26). Micro, Small, and Medium Enterprises’ Readiness for Digital Transformation in Indonesia. Economies. https://doi.org/10.3390/economies11060156
Cigdem, Marco, & David. (2016). Toward a continuum of measurement scales in Just-in-Time (JIT) research–an examination of the predictive validity of single-item and multiple-item measures. https://link.springer.com/article/10.1007/s12063-016-0108-x
Cueto, L. J., Frisnedi, A. F. D., Collera, R. B., Batac, K. I. T., & Agaton, C. B. (2022, January 5). Digital Innovations in MSMEs During Economic Disruptions: Experiences and Challenges of Young Entrepreneurs. Administrative Sciences. https://doi.org/10.3390/admsci12010008
dhan. (2020). Quantitative research: A successful investigation in natural and social sciences. https://www.ceeol.com/search/article-detail?id=939590
Dhirendra, Abdul, Prateek, & medium. (2024). What drives the adoption of digital technology in the micro, small, and medium enterprises sector in a developing economy? https://www.emerald.com/insight/content/doi/10.1108/JBIM-09-2023-0512/full/html
Eisha, Ariyo, & Syifa. (2023). Digital Divide among Micro, Small, and Medium-Sized Enterprises: What Can We Learn from Household Enterprises? http://www.indiaenvironmentportal.org.in/files/file/Digital%20Sustainable%20Development%20in%20Asia.pdf#page=59
Hair, Joe, Matt, & Christian. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. https://www.sciencedirect.com/science/article/pii/S0148296319307441
Hendrawan, S. A., Chatra, N. A., Iman, N. N., Hidayatullah, N. S., & Suprayitno, N. D. (2024, June 20). Digital Transformation in MSMEs: Challenges and Opportunities in Technology Management. Jurnal Informasi dan Teknologi. https://doi.org/10.60083/jidt.v6i2.551
Herbert, Kit-Tai, & David. (2005). Goodness of Fit in Structural Equation. Contemporary psychometrics. https://books.google.com/books?hl=en&lr=&id=f5_QCpdKmuwC&oi=fnd&pg=PA278&dq=The+goodness+of+fit+(GoF)+test+is+a+crucial+step+in+the+evaluation+of+the+confirmatory+factor+analysis+(CFA)+model+to+assess+the+extent+to+which+the+proposed+mo&ots=50T6AxU_ov&sig=0KdF5uckJi9EoroVAtY5xNaPMU4
Justin. (2021). CB-SEM vs PLS-SEM methods for research in social sciences and technology forecasting. https://www.sciencedirect.com/science/article/pii/S0040162521005254
Kang. (2021). Sample size determination and power analysis using the G* Power software. https://synapse.koreamed.org/articles/1149215
Manafe, M. W. N. (2024, February 1). Dynamic Success Dynamics of SMEs in Digital Transformation: Analysis of Social and Psychological Factors. Journal of Contemporary Administration and Management (ADMAN). https://doi.org/10.61100/adman.v2i1.127
Nada, Adnane, Marina, & Sascha. (2022). Drivers of digital transformation in SMEs. https://ieeexplore.ieee.org/abstract/document/9954626/
Nafizha, Andriani, & l. (2022). Literature review: The efforts to strengthening of micro, small and medium-sized enterprises (MSME) in Indonesia. http://www.ajmesc.com/index.php/ajmesc/article/view/52
Nikopoulou, M., Kourouthanassis, P., Chasapi, G., Pateli, A., & Mylonas, N. (2023, February 2). Determinants of Digital Transformation in the Hospitality Industry: Technological, Organizational, and Environmental Drivers. Sustainability. https://doi.org/10.3390/su15032736
Pan, X., Oh, K. S., & Wang, M. (2021, November 17). Strategic Orientation, Digital Capabilities, and New Product Development in Emerging Market Firms: The Moderating Role of Corporate Social Responsibility. Sustainability. https://doi.org/10.3390/su132212703
Phakiti. (2018). Confirmatory factor analysis and structural equation modeling. https://link.springer.com/chapter/10.1057/978-1-137-59900-1_21
Rupeika-Apoga, R., & Petrovska, K. (2022, October 20). Barriers to Sustainable Digital Transformation in Micro-, Small-, and Medium-sized Enterprises. Sustainability. https://doi.org/10.3390/su142013558
Theresa, & tal. (2019). Digital technology, digital capability and organizational performance: A mediating role of digital innovation. https://www.emerald.com/insight/content/doi/10.1108/IJIS-08-2018-0083/full/html
Viet, & Chieh-Yu. (2023). Exploring the determinants of digital transformation adoption for SMEs in an emerging economy. https://www.mdpi.com/2071-1050/15/9/7093
Weng, & logical. (2024). A typology of validity: Content, face, convergent, discriminant, nomological and predictive validity. https://www.emerald.com/insight/content/doi/10.1108/JTS-03-2024-0016/full/html
Yelena, & Maksim. (2022). The impact of the COVID-19 pandemic on the creative industries: A literature review and future research agenda. https://www.sciencedirect.com/science/article/pii/S0148296321007141
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Published
2024-11-11
How to Cite
Imam Darul Firmansyah, Herli, M., & Ahmad Ghufrony. (2024). Determinant of Digital Transformation on MSME Creative Industry: A Confirmatory Factor Analysis. Ilomata International Journal of Management, 6(1), 37–52. https://doi.org/10.61194/ijjm.v6i1.1422
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