Presenters: Devita Kurnianingrum, Frank Aligarh
Affiliation: Universitas Islam Negeri Raden Mas Said Surakarta
Room: 7
ICIES News- At the 4th Islamic Economics Studies (ICIES) Conference 2024, held in Room 7, Devita Kurnianingrum and Frank Aligarh from Universitas Islam Negeri Raden Mas Said Surakarta presented their insightful research titled “The Effect of IT Capability, Digital Transformation, and Innovativeness on The Firm Performance Of MSMEs in Solo Raya.”
The study focuses on the dynamic interplay between IT Capability, Digital Transformation, Innovativeness, and Firm Performance within Micro, Small, and Medium Enterprises (MSMEs) in the Solo Raya region. Utilizing data from 136 MSME owners and managers, the researchers applied the Partial Least Squares (PLS) method with Smart-PLS version 3 software to analyze the complex relationships among these variables.
Key findings from their research reveal that IT Capability significantly enhances both Digital Transformation and Innovativeness. These two factors, in turn, positively influence Firm Performance, highlighting the critical mediating roles they play. Interestingly, the study finds that IT Capability does not directly impact Firm Performance without the influence of Digital Transformation and Innovativeness.
The presenters also noted some limitations in their study, including the regional focus on Solo Raya, which may affect the generalizability of the results, and the use of cross-sectional data, which does not allow for the analysis of long-term causal effects. Despite these limitations, the study provides valuable insights into the vital roles of IT Capability, Digital Transformation, and Innovativeness in improving firm performance.
The findings have significant implications for policymakers and business managers, suggesting that strategic investments in IT, digital transformation, and innovation are essential for enhancing the performance of MSMEs. Kurnianingrum and Aligarh’s work underscores the importance of these elements in driving business success and offers a roadmap for future research with broader scopes and longitudinal designs to validate their conclusions.
Their presentation at ICIES 2024 has sparked considerable interest and discussion, highlighting the growing recognition of the transformative potential of IT and innovation in the business landscape.