Determinants of MSME Performance in Karawang Regency

https://doi.org/10.35912/gaar.v4i1.5639
Published: Nov 11, 2025

Abstract:

Purpose: The objective of this research is to determine the impact of financial literacy, fiscal intensification, financial capital, and digital adoption on MSME business performance in Karawang Regency.

Methodology/approach: A quantitative method was applied in this study using a survey of 60 respondents. The collected data were processed with IBM SPSS Statistics 25 software, employing multiple linear regression along with validity, reliability, and classical assumption testing.

Results/findings: Based on the analysis, all research instruments were proven valid and reliable, and the data were normally distributed, heteroscedastic, and free from multicollinearity issues. Each of the four independent variables shows a positive and significant effect on MSME business performance, where digital usage has the highest influence, with a regression coefficient of 0.679.

Conclusions: The findings indicate that the combined influence of financial literacy, fiscal intensification, financial capital, and digital adoption significantly enhances MSME business performance. Among these, digital adoption plays the most dominant role, indicating that embracing technology is key to improving competitiveness and business growth.

Limitations: Despite the fact that numerous other factors also affect MSME performance, only four variables were used. Additionally, the short study duration makes it impossible to record long-term changes in MSME company dynamics, and the use of a closed-ended questionnaire may induce subjective bias.

Contribution: It is projected that this research will generate new contributions to the scientific development of financial management and entrepreneurship while offering a clearer understanding of the key factors impacting MSME performance in the digital age.

Keywords:
1. Business Performance
2. Digital Adoption
3. Financial Literacy
4. Fiscal Incentives
5. Financial Capital
6. MSMEs
Authors:
1 . Lia Ferina
2 . Dewi Widyaningsih
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How to Cite
Ferina, L., & Widyaningsih, D. (2025). Determinants of MSME Performance in Karawang Regency. Goodwood Akuntansi Dan Auditing Reviu, 4(1), 103–119. https://doi.org/10.35912/gaar.v4i1.5639
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Issue & Section
Vol. 4 No. 1 (2025): November
Articles
References

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    Aryanto, A., Farida, I., & Ramahdani, A. (2023). The effect of using digital-based accounting applications on the quality of accounting information and business performance in MSMEs. Journal of Applied Managerial Accounting, 7 (2), 188–199. https://doi.org/10.30871/jama.v7i2.6626

    Aryanto, A., Hanum, N., & Syaefudin, R. (2023). Technological, organizational, and environmental factors in the implementation of digital accounting and their impact on MSME performance. Owner, 7 (1), 632–643. https://doi.org/10.33395/owner.v7i1.1224

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    Pramestiningrum, DR, & Iramani, R. (2020). The influence of financial literacy, financial capital, and government policy on business performance in MSMEs in East Java. Perbanas Journal of Business and Banking, 9 (2), 1–15. https://doi.org/10.14414/jbb.v9i2.1750

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  1. Abdullah, M. (2025). Digital readiness and financial inclusion among MSMEs in Indonesia . Journal of Entrepreneurship and Business Development, 12 (1), 45–59.
  2. Akca, N., Sönmez, S., ?ener, T., & Akca, C. (2018). An evaluation of the effect of financial literacy education on financial literacy among college students. International Journal of Humanities and Social Science, 8 (8), 152–158. https://doi.org/10.30845/ijhss.v8n8p17
  3. Aryanto, A., Farida, I., & Ramahdani, A. (2023). The effect of using digital-based accounting applications on the quality of accounting information and business performance in MSMEs. Journal of Applied Managerial Accounting, 7 (2), 188–199. https://doi.org/10.30871/jama.v7i2.6626
  4. Aryanto, A., Hanum, N., & Syaefudin, R. (2023). Technological, organizational, and environmental factors in the implementation of digital accounting and their impact on MSME performance. Owner, 7 (1), 632–643. https://doi.org/10.33395/owner.v7i1.1224
  5. Atkinson, A., & Messy, F. (2012). Measuring financial literacy: Results of the OECD/International Network on Financial Education (INFE) pilot study . OECD Publishing.
  6. Baskoro, DB, Simanjuntak, R., & Sudarmadji. (2024). The effect of tax incentives on innovation and firm performance: A literature review. LABS Journal, 29 (3), 4–6. https://doi.org/10.57134/labs.v29i3.101
  7. Bouazza, A.B., Ardjouman, D., & Abada, O. (2015). Establishing the factors influencing the growth of small and medium-sized enterprises in Algeria. American International Journal of Social Science, 4 (2), 101–115.
  8. Choirunnias, N., Askandar, NS, & Mahsuni, AW (2025). Analysis of the influence of digital technology adoption and financial literacy on the financial performance of small and medium enterprises (case study in Batu City). Journal of Accounting Research, 14 (1), 424–432.
  9. Fajar, MS, Mus, AR, & Sari, R. (2023). The influence of tax incentives and business strategies on MSME performance during the pandemic. Journal of Accounting Finance (JAF), 4 (1), 144–154. https://doi.org/10.52103/jaf.v4i1.1164
  10. Ghozali, I. (2018). Multivariate analysis application with IBM SPSS 19 program (5th ed.). Diponegoro University Publishing Agency.
  11. Indra Putri, WT, & Sumiari, KN (2021). The influence of financial literacy on students' financial behavior. E-Journal of Economics and Business, Udayana University, 10 (3), 127. https://doi.org/10.24843/eeb.2021.v10.i03.p03
  12. Kasendah, BS, & Wijayanka, C. (2019). The influence of financial literacy on MSME performance. Journal of Management, 3 (1), 1–160. https://doi.org/10.36555/almana.v3i1.459
  13. Latif, IS (2024) Digitalization of MSMEs in Selapajang Jaya Village. (2024). Journal of Community Service (JPM) . Goodwood Publishers. https://doi.org/10.35912/yumary.v5i1.2939
  14. Lia Ariani, RHUP, & Qristin Violinda. (2023). Factors influencing business performance of BRI Semarang KUR customers. Jurnal Bisnis Kolega, 9 (1), 10–23. https://doi.org/10.57249/jbk.v9i1.99
  15. Lusardi, A., & Mitchell, O. S. (2013). The economic importance of financial literacy. Journal of Economic Literature, 52 (1), 65–94. 10.1257/jel.52.1.5
  16. Munasib, N., & Fitriyah, F. (2025). Synergy of financial literacy and fintech: Improving MSME performance through financial inclusion. Journal of Accounting, Finance, and Management (JAKMAN), 6 (3), 727–743. https://doi.org/10.35912/jakman.v6i3.4407
  17. Naufal, MI, & Purwanto, E. (2022). The impact of financial literacy on the sustainability performance of MSMEs (case study of the F&B industry in Sumbersari District, Jember). Journal of Business Administration, 16 (2), 209–215. https://doi.org/10.21776/ub.profit.2022.-16.02.5
  18. Ningsih, LF, & Fitriani, N. (2025). The impact of financial literacy and accounting information systems on improving the financial performance of MSMEs in the digital era. Pendas: Scientific Journal of Elementary Education, 10 (2), 330–347. https://doi.org/10.23969/jp.v10i02.29017
  19. OJK. (2022). OJK SNLIK 2022: Public financial literacy and inclusion index increases . https://nki.go.id
  20. Palupi, E. (2023). Financial Literacy Training for MSMEs in the Digital Era. (2024). Journal of Community Service (JNM) . Goodwood Publishers. https://doi.org/10.35912/jnm.v3i3.3349
  21. Pramithasari, C. (2025). The Influence of Financial Literacy, Fintech Peer-to-Peer Lending and Payment Gateway on the Financial Performance of MSMEs (Case Study of Medan City).
  22. Rahmawati, D. (2021). Factors of MSMEs in Adopting E-Market and Their Impact on MSME Performance. (2021). Journal of Digital Business and Marketing (JBPD) . Goodwood Publishers. https://doi.org/10.35912/jbpd.v1i1.455
  23. Phornlaphatrachakorn, K., & Kalasindhu, K. N. (2021). Digital accounting, financial reporting quality and digital transformation: Evidence from Thai listed firms. Journal of Asian Finance, 8 (8), 409–419. https://doi.org/10.13106/jafeb.2021.vol8.no8.0409
  24. Pramestiningrum, DR, & Iramani, R. (2020). The influence of financial literacy, financial capital, and government policy on business performance in MSMEs in East Java. Perbanas Journal of Business and Banking, 9 (2), 1–15. https://doi.org/10.14414/jbb.v9i2.1750
  25. Sanistasya, P.A., Raharjo, K., & Iqbal, M. (2019). The influence of financial literacy and financial inclusion on the performance of small businesses in East Kalimantan. Jurnal Economia, 15 (1), 48–59. https://doi.org/10.21831/economia.v15i1.23192
  26. Setyaningsih, SD, Mulyani, S., & Akbar, B. (2021). Quality and efficiency of accounting information systems. Utopía y Praxis Latinoamericana , 26(93), 323–337.
  27. Sugiyono. (2017). Business research methods: Quantitative, qualitative, combination and R&D approaches . Alfabeta.
  28. Sugiyono. (2020). Quantitative, qualitative, and R&D research methodology . Alfabeta.
  29. Ukmindonesia. (2023). MSME data, number and growth of micro, small, and medium enterprises in Indonesia . https://ukmindonesia.id