Performance Path from Policy and Digital Literacy to SME Sustainability
DOI:
https://doi.org/10.61255/jeemba.v4i6.1835Keywords:
Government Policy, Digital Literacy, SME Performance, SME Sustainability, Resource ConversionAbstract
Objectives – This study examines how government policies and digital literacy shape SME sustainability through SME performance in Lampung Province, Indonesia, and investigates whether the two predecessors follow different paths towards long-term sustainability
Design/methodology/approach – A cross-sectional quantitative survey was conducted among 143 SME owners and managers selected through purposive sampling. This model is assessed using PLS-SEM with four reflective constructs: government policy, digital literacy, SME performance, and SME sustainability.
Findings/Results – Government policies have a positive impact on SME performance and SME sustainability, while digital literacy greatly improves SME performance but does not have a significant direct impact on sustainability. The performance of SMEs has a strong positive impact on sustainability. The mediation analysis showed that performance fully mediated the digital–sustainability relationship robustly, while performance mediation on the government–sustainability policy relationship was only supported on the full sample and became insignificant after a non-invariant response pattern was issued, so it should be interpreted as a tentative and sample-dependent (sensitivity-dependent) finding, rather than a generally supported finding. Sensitivity analysis showed that the digital–performance–sustainability literacy pathway remained strong and consistent, while the indirect government policy pathway was much more sensitive to screening for response quality
Originality/Value – This study identifies asymmetric resource conversion pathways towards SME sustainability, showing that external institutional support can operate directly, while internal digital capabilities generate sustainable value especially when transformed into superior business performance.
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Copyright (c) 2026 Warsiyah, Noorikha Pandayahesti Saputeri, Tulus Suryanto, Juhari Ali, Zulkarnaen Kedah
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