Entrepreneurial and Firm Determinants of SME Growth through Behavior Based Financial Technology Innovation
Article Sidebar
-
Business Characteristics, Entrepreneurial Characteristics, Financial Technology Innovation Based on Behavior, MSME, Business Growth
Abstract
This paper empirically explores the relationship between the characteristics of the business and the characteristics of the entrepreneur and the growth of the business in Small and Medium Enterprises (SMEs), with behavior-based financial technology innovation as the mediator. The theories of financial technology, the Resource Based View, and the Theory of Planned Behavior are incorporated uniquely with the theory of Behavior-Based Financial Technology Innovation for SMEs, and the significance of behavioral innovation in the development of the SMEs is shown to be substantial. A quantitative approach is used to design the research, and the Structural Equation Model is used to analyze the data with the assistance of the WarpPLS software. A total of 595 SMEs operating in the province of North Sumatra are taken as the sample, and the survey results are collected from the owners. A total of thirteen hypotheses are formed and validated to detect the direct and indirect relationship between the characteristics of the business, namely size and years, the characteristics of the entrepreneur, namely education and experience, the innovation variable, and the SMEs' growth. The results show that the ages of the firm, education, and the experience of the entrepreneur have a significant effect on the growth of the SMEs. Additionally, the variable also proves to be positively significant to the overall effect. Finally, the variable acted as the mediating agent between the size of the firm, the ages of the firm, and the experience of the entrepreneur and the overall effect, and as the non-mediating agent between the education level and the overall effect. The findings have significant implication to the use of behavioral financial technology as the SBPs' strategy to ensure behavioral and sustainable growth.
Full text article
References
[1] J. B. Tadeo, X. L. D. Mendoza, M. Francis Jr, S. M. Dumagat, and R. Q. Pamintuan, “Understanding economic contributions of msmes among philippine regions,” Journal of Management, Economics, and Industrial Organization, vol. 7, no. 3, pp. 1–15, 2023.
[2] Coordinating Ministry for Economic Affairs of the Republic of Indonesia. (2021, Apr.) The importance of collaboration between fintech and msmes in accelerating national economic recovery. Coordinating Ministry for Economic Affairs of the Republic of Indonesia. [Online]. Available: https://www.ekon.go.id/publikasi/detail/2922/pentingnya-kolaborasi-fintech-dan-umkm-dalam-mempercepat-pemulihan-ekonomi-nasional
[3] S. Ahmad, T. Tayachi, S. G. Haq, W. Wang’ombe, and F. Ahmad, “Entrepreneurial-specific characteristics and access to finance of SMEs in khyber pakhtunkhwa, pakistan,” Sustainability, vol. 14, no. 16, pp. 1–14, 2022, https://doi.org/10.3390/su141610189.
[4] A. Nugraha and A. L. Sari, “Improvement of small and medium businesses through the utilization of good human resources management,” ENDLESS: International Journal of Future Studies, vol. 5, no. 1, pp. 153–164, 2022, https://doi.org/10.54783/endlessjournal.v5i1.44.
[5] C. Lukita, A. K. Chandra, R. Fahrudin, N. M. Agatha, and D. P. Suci, “Maturity level measurement model of msmes for sustainable economic growth,” Aptisi Transactions on Technopreneurship (ATT), vol. 8, no. 2, pp. 434–442, 2026, https://doi.org/10.34306/att.v8i2.781.
[6] C. A. Kero and A. T. Bogale, “A systematic review of resource-based view and dynamic capabilities of firms and future research avenues.” International Journal of Sustainable Development & Planning, vol. 18, no. 10, 2023.
[7] A. Williams, Y. Hasudungan, and N. Azizah, “The implementation of effective financial management to increase the profitability of startups,” Startupreneur Business Digital (SABDA Journal), vol. 4, no. 1, pp. 47–54, 2025.
[8] T. L. Anita, R. G. Freedy, N. Silawati, and M. Sunengsih, “Mathematical logic as a foundation for ai-driven decision-making systems,” Smart Human-centered Emerging Research in Machine Intelligence, vol. 2, no. 1, pp. 14–25, 2026.
[9] P. K. Ozili, “Fintech adoption, regulation, and SME growth,” Technological Forecasting and Social Change, 2023.
[10] T. S. Bahukeling, A. I. Suroso, A. Buono, and P. Nurhayati, “Enhancing msme digital marketing through public-private partnerships with fuzzy ahp,” Aptisi Transactions on Technopreneurship (ATT), vol. 8, no. 1, pp. 325–338, 2026, https://doi.org/10.34306/att.v8i1.667.
[11] K. M. Mang’ana, “Financial management practices and agri-sme performance: does subjective financial literacy hold the key?” Cogent Business & Management, vol. 13, no. 1, p. 2612787, 2026.
[12] N. P. Ndung’u, “Effect of fintech on growth of small and medium enterprises in kiambu county, kenya,” IOSR Journal of Business and Management, vol. 23, no. 8, pp. 37–72, 2021, https://doi.org/10.9790/487X-2308033772.
[13] T.-N.-L. Nguyen and S.-T. Le, “Factors leading to the digital transformation dead zone in shipping smes: A dynamic capability theory perspective,” Sustainability, vol. 17, no. 12, p. 5553, 2025.
[14] A. A. Setyawan, E. Setyawati, and J. S. P. Tyoso, “Digital resilience framework for msme development in facing global market volatility,” Aptisi Transactions on Technopreneurship (ATT), vol. 8, no. 1, pp. 239–252, 2026, https://doi.org/10.34306/att.v8i1.800.
[15] M. Asad, M. A. Bait Ali Sulaiman, A. M. S. Ba Awain, M. Alsoud, Z. Allam, and M. U. Asif, “Green entrepreneurial leadership, and performance of entrepreneurial firms: does green product innovation mediates?” Cogent Business & Management, vol. 11, no. 1, p. 2355685, 2024.
[16] S. Handoyo, S. Mulyani, E. K. Ghani, and S. Soedarsono, “Firm characteristics, business environment, strategic orientation, and performance,” Administrative Sciences, vol. 13, no. 3, 2023, https://doi.org/10.3390/admsci13030074.
[17] A. K. Sinha, A. K. Mishra, M. R.L., and R. Prabhudesai, “Examining the determinants of small firms’ performance in india,” International Journal of Productivity and Performance Management, vol. 71, no. 6, pp. 2496–2533, 2022, https://doi.org/10.1108/IJPPM-10-2020-0508.
[18] A. Nurhaliza, “Bank indonesia: The number of MSMEs in north sumatra increased by 50 percent,” Bisnis.com, 2023, https://sumatra.bisnis.com/read/20230317/534/1638554/bank-indonesia-jumlah-umkm-di-sumut-meningkat-50-persen.
[19] D. Novitasari, F. S. Goestjahjanti, U. Rahardja, S. Santoso, S. V. Sihotang, N. A. Santoso, and G. P. Cesna, “Optimizing msme performance through marketing capabilities and digital marketing adoption,” in 2025 4th International Conference on Creative Communication and Innovative Technology (ICCIT). IEEE, 2025, pp. 1–7.
[20] M. D. T. P. Nasution, Y. Rossanty, R. Harahap, A. R. Tanjung, and T. A. M. Nasution, “Technology-driven resource utilization and integration to enhance firm performance,” Aptisi Transactions on Technopreneurship (ATT), vol. 8, no. 1, pp. 268–283, 2026, https://doi.org/10.34306/att.v8i1.472.
[21] U. Rahardja, M. Miftah, M. Rakhmansyah, and J. Zanubiya, “Revolutionizing financial services with big data and fintech: A scalable approach to innovation,” ADI Journal on Recent Innovation, vol. 6, no. 2, pp. 118–129, 2025.
[22] S. S. Wulandari, M. L. B. M. Diah, and A. Asari, “Digital proficiency and entrepreneurial mindset for sme success through market savvy and tech literacy,” Aptisi Transactions on Technopreneurship (ATT), vol. 7, no. 1, pp. 26–36, 2025, https://doi.org/10.34306/att.v7i1.527.
[23] N. Rohaeni, M. Meutia, I. Indriana, and Y. Januarsi, “Does fintech adoption enhance msme performance? the role of financial behaviour and digital financial literacy,” Shirkah: Journal of Economics and Business, vol. 11, no. 1, pp. 107–126, 2026.
[24] R. P´erez-Campdesu˜ner, A. S´anchez-Rodr´ıguez, R. Mart´ınez-Vivar, R. X. Manciati-Alarc´on, M. De Miguel-Guzm´an, and G. Garc´ıa-Vidal, “Socio-cultural and behavioral determinants of fintech adoption and credit access among ecuadorian smes,” Journal of Risk and Financial Management, vol. 19, no. 1, p. 64, 2026.
[25] C. Ruiz-Martin, G. Wainer, and A. Lopez-Paredes, “Exploration of network theory to evaluate organizational resilience,” International Journal of Mathematical, Engineering and Management Sciences, vol. 7, 2022, https://doi.org/10.33889/IJMEMS.2022.7.1.003.
[26] R. Mathur and S. Sharma, “Behavioral intention to adopt peer to peer lending: A study on indian msmes.” International Journal of Mathematical, Engineering & Management Sciences, vol. 10, no. 6, 2025.
[27] M. A. M. Saif et al., “Determinants of the intention to adopt digital-only banks in malaysia,” Sustainability, vol. 14, no. 17, pp. 1–32, 2022, https://doi.org/10.3390/su141711043.
[28] L. Judijanto, “Fintech disruption in traditional banking: A bibliometric review,” The Es Economics and Entrepreneurship, vol. 3, no. 03, pp. 333–346, 2025, https://doi.org/10.58812/esee.v3i03.542.
[29] C. J. Collins, “Expanding the resource-based view model of strategic human resource management,” International Journal of Human Resource Management, vol. 32, no. 2, pp. 331–358, 2021, https://doi.org/10.1080/09585192.2019.1711442.
[30] P. H. P. Tan, S. Wijaya, U. Rahardja, B. N. Henry, and A. Anjani, “Modeling the impact of digital literacy on ai based learning adoption through perceived usefulness and easeof use,” Smart Human-centered Emerging Research in Machine Intelligence, vol. 1, no. 2, pp. 56–64, 2025.
[31] M. H. Kadim, A. Kadim, M. Muhtarom, and U. Rahardja, “Digital financial management adaptability for global market expansion,” International Journal of Cyber and IT Service Management (IJCITSM), vol. 6, no. 1, pp. 116–127, 2026.
[32] R. Gra˜na Alvarez et al., “Financial literacy in SMEs: A systematic literature review,” Journal of Small Business Management, pp. 1–50, 2022, https://doi.org/10.1080/00472778.2022.2051176.
[33] X. Liu et al., “Top management team boundary-spanning leadership,” Frontiers in Psychology, vol. 13, pp. 1–14, 2022, https://doi.org/10.3389/fpsyg.2022.988771.
[34] T. Widiyatmoko, U. Rahardja, N. Septiani, D. I. Desrianti, and M. F. Fazri, “The role of financial literacy and fintech in promoting financial inclusion,” in 2024 2nd International Conference on Technology Innovation and Its Applications (ICTIIA). IEEE, 2024, pp. 1–5.
[35] U. Rahardja, A. Sutarman, M. Muhtarom, and B. Any, “Decentralized finance (defi) for enterprise treasury management,” AI, Innovation, and Resilience for the Environment (AIR), vol. 1, no. 1, pp. 17–24, 2026.
[36] Z. Liao, Y. Liu, J. Dai, and Y. Li, “An application of the planned behavior theory to predict chinese firms’ environmental innovation,” Journal of Environmental Planning and Management, vol. 65, no. 14, pp. 2676–2695, 2022.
[37] A. Anton Lie, “The social capital in business organizations,” vol. 4, no. 1, pp. 58–63, 2022, https://doi.org/10.29103/ijevs.v4i1.6619.
[38] M.-H. Hsiao, “Resource integration and firm performance through organizational capabilities for digital transformation,” Digital Transformation and Society, 2024.
[39] M. Willie, “Leveraging digital resources: a resource-based view perspective,” Golden Ratio of Human Resource Management, vol. 5, no. 1, pp. 01–14, 2025.
[40] S. K. A. Rizvi, B. Rahat, B. Naqvi, and M. Umar, “Revolutionizing finance: The synergy of fintech, digital adoption, and innovation,” Technological Forecasting and Social Change, vol. 200, p. 123112, 2024.
[41] K. S. Al-Omoush and A. A. Alsmadi, “Determinants of fintech adoption maturity and its impact on service innovation: evidence from the banking sector,” EuroMed Journal of Business, pp. 1–27, 2026.
Authors
Copyright (c) 2026 Edi Suranta Tarigan, Harjum Muharam, Wisnu Mawardi
This work is licensed under a Creative Commons Attribution 4.0 International License.
This journal permits and encourages authors to post items submitted to the journal on personal websites while providing bibliographic details that credit its publication in this journal.
Authors are permitted to post their work online in institutional/disciplinary repositories or on their own websites. Pre-print versions posted online should include a citation and link to the final published version in Journal of Librarianship and Scholarly Communication as soon as the issue is available; post-print versions (including the final publisher's PDF) should include a citation and link to the journal's website.