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Techno-finance Literacy and Company Performance: Mediating Role of Risk Management Practices based on Structural Equation Modeling

Author

Listed:
  • Embun Suryani

    (University of Mataram, Mataram, Indonesia)

  • Diswandi Diswandi

    (University of Mataram, Mataram, Indonesia)

  • Royana Afwani

    (University of Mataram, Mataram, Indonesia)

Abstract

This study aimed to develop a structural model to explore the dynamic model of small and medium-sized enterprise (SME) performance, technological and financial literacy (techno-finance literacy), and risk management (RM) practices. Data collected from 285 SMEs in Lombok, Indonesia was analyzed using PLS-SEM regarding techno-finance literacy. The data analysis is presented using both quantitative and qualitative descriptive approaches. The results indicated that technological and financial literacy contribute significantly to SME performance. Additionally, RM practices affect SME performance, and partially mediate the effect of technology and financial literacy on SME performance. Therefore, the managerial implications of this study show that SMEs must adopt technology in running their businesses if they wish to improve performance and manage financial risks. The adoption of technology will help SMEs overcome their weaknesses and reduce risk.

Suggested Citation

  • Embun Suryani & Diswandi Diswandi & Royana Afwani, 2024. "Techno-finance Literacy and Company Performance: Mediating Role of Risk Management Practices based on Structural Equation Modeling," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 15(03), pages 1-24, October.
    • Handle: RePEc:wsi:jicepx:v:15:y:2024:i:03:n:s1793993324500169
    DOI: 10.1142/S1793993324500169
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