Digital Transformation and Financial Literacy as Drivers of Innovation and Financial Agility: Evidence from Family-Owned Businesses in Southeast Asia

Restu Fahdiansyah; Siti Aisyah

doi:10.14203/STIPM.2025.416

Digital Transformation and Financial Literacy as Drivers of Innovation and Financial Agility: Evidence from Family-Owned Businesses in Southeast Asia

Restu Fahdiansyah, Siti Aisyah

Abstract

This study investigates how digital transformation (DT) and financial literacy (FL) influence innovation capability (IC) and financial management effectiveness (FME) in family-owned small and medium enterprises (SMEs) across five Southeast Asian countries. Grounded in the resource-based view, the model positioned organizational learning (OL) and strategic agility (SA) as mediators linking DT and FL to performance outcomes. Data were collected through a cross-sectional survey of 300 respondents and analyzed using structural equation modeling (SEM). The findings reveal that DT primarily enhances OL, while FL exerts a stronger influence on SA. Both OL and SA significantly drive IC, which in turn positively affects FME and firms’ competitiveness (FC). Additionally, FL is revealed to be a meaningful predictor of DT, suggesting that financially literate leaders are more likely to adopt and implement digital tools effectively. This study also uncovers cross-country differences in path strengths, reflecting how institutional context shapes capability development. While all core hypotheses are supported, this study is limited by its cross-sectional design, reliance on selfdeveloped measurement items, and partial regional scope. This study contributes to the literature on SMEs’ internal capacity-building by highlighting the complementary roles of digital and financial competencies in enhancing innovation and strategic outcomes within family-owned business context.

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DOI: http://dx.doi.org/10.14203/STIPM.2025.416