Analyzing The Interactive Effects Of Financial Technology Adoption On Corporate Financial Performance And Growth
DOI:
https://doi.org/10.56457/tjm.v4i2.418Keywords:
Financial Technology Adoption, Financial Performance, Firm Growth, Digital Financial Literacy, PLS-SEM, MSMEsAbstract
This study aims to examine the effect of Financial Technology Adoption (X) on Financial Performance (Y1) and Firm Growth (Y2), as well as to analyze the moderating role of Digital Financial Literacy (Z) among Micro, Small, and Medium Enterprises (MSMEs) in West Java. Utilizing a quantitative approach with Partial Least Squares Structural Equation Modeling (PLS-SEM) executed via SmartPLS, data were collected from a sample of MSME owners in West Java. The empirical results reveal that Financial Technology Adoption has a negative and significant effect on short-term Financial Performance, confirming the Productivity Paradox due to initial investment costs and operational learning curves. Conversely, Financial Technology Adoption demonstrates a positive and significant effect on long-term Firm Growth. Financial Performance also positively and significantly influences Firm Growth. Furthermore, Digital Financial Literacy acts as a dominant independent predictor that directly enhances both Financial Performance and Firm Growth. However, moderation analysis demonstrates that Digital Financial Literacy does not moderate the relationship between Financial Technology Adoption and Firm Growth (p > 0.05), leading to the rejection of the moderation hypothesis. This occurs because modern financial technologies are highly intuitive, allowing their growth benefits to materialize directly regardless of the level of moderating literacy. Structural model evaluation yields an R2 of 0.475 for Firm Growth and a strong predictive relevance (Q2) of 0.330. This study offers strategic implications for policymakers and business practitioners to balance financial technology adoption with digital capacity management.
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Copyright (c) 2026 Henik Hari Astuti, Ardi Kusmara, Inayatulloh Inayatulloh, Ana Wijandari
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