The Influence of Financial Literacy, Business Networking, and Entrepreneurial Orientation on MSME Performance in Surabaya with Market Orientation as a Moderating Variable
Keywords:
Financial Literacy, Business Networking, Entrepreneurial Orientation, Market Orientation, MSME Performance
Abstract
This study investigates the influence of financial literacy, business networking, and entrepreneurial orientation on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Surabaya, with market orientation as a moderating variable. A quantitative approach was employed, and data were collected through structured questionnaires distributed to 99 MSME owners and managers. Partial Least Squares Structural Equation Modeling (PLS-SEM) was applied to analyze the data. The results indicate that financial literacy and entrepreneurial orientation significantly enhance MSME performance, whereas business networking shows no significant impact. Furthermore, market orientation does not moderate the relationship between financial literacy or business networking and MSME performance. These findings highlight the importance of strengthening entrepreneurs’ financial capabilities and entrepreneurial orientation to improve MSME competitiveness and sustainability.
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References
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Adomako, S., & Danso, A. (2014). Financial literacy and firm performance: The moderating role of financial capital availability and resource flexibility. International Journal of Management & Organizational Studies, 3(4).
Adomako, S., Danso, A., & Damoah, J. O. (2016). The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana. Venture Capital, 18(1), 43–61. https://doi.org/10.1080/13691066.2015.1079952
Ahmad, K. (2024). The influence of financial literacy, risk orientation and qualified accountants on performance in micro, small and medium enterprises: The mediating role of management accounting. International Review of Management and Marketing, 14(6), 317–324. https://doi.org/10.32479/irmm.17044
Aji, L. S., Hartanti, S., & Rahmawati, N. (2023). Pengaruh orientasi kewirausahaan, orientasi pasar, dan manajemen kualitas total terhadap kinerja UMKM di Karanganyar. Jurnal Ekonomi dan Pendidikan Indonesia (JUPE), 9(3), 190–201. https://ejournal.unesa.ac.id/index.php/jupe/article/view/51438
Ali, H., & Li, Y. (2021). Financial literacy, network competency, and SMEs financial performance: The moderating role of market orientation. Journal of Asian Finance, Economics and Business, 8(10), 341–352. https://doi.org/10.13106/jafeb.2021.vol8.no10.0341
Al-shami, S. A., Damayanti, R., Adil, H., Farhi, F., & Al Mamun, A. (2024). Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia. Heliyon, 10, e34902. https://doi.org/10.1016/j.heliyon.2024.e34902
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Bolton, D. L., & Lane, M. D. (2012). Individual entrepreneurial orientation: Development of a measurement instrument. Education + Training, 54(2/3), 219–233. https://doi.org/10.1108/00400911211210314
Bshayreh, M. M., Qassim, A. A., Qawqzeh, H. K., Al Dabbas, Y. J., & Alkarasneh, H. M. (2024). The moderating effect of financial literacy on the relationship between financial technology and firms’ performance. WSEAS Transactions on Business and Economics, 22, 659–669. https://doi.org/10.37394/23207.2025.22.66
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Mahwah, NJ: Lawrence Erlbaum Associates.
Dudi?, Z., Dudi?, B., Gregus, M., Novackova, D., & Djakovic, I. (2020). The Innovativeness and Usage of the Balanced Scorecard Model in SMEs. Sustainability, 12(8), 3221. https://doi.org/10.3390/su12083221
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23(4), 660–679.
Fajarwati, D., Widyastuti, T., & Daito, A. (2025). Influences of accounting information system quality, financial innovation, and access to capital on SME performance: The moderating role of financial literacy. Pakistan Journal of Life and Social Sciences, 23(1), 7334–7345. https://doi.org/10.57239/PJLSS-2025-23.1.00569
Fan, M., Qalati, S. A., Khan, M. A. S., Shah, S. M. M., Ramzan, M., & Khan, R. S. (2021). Effects of entrepreneurial orientation on social media adoption and SME performance: The moderating role of innovation capabilities. PLOS ONE, 16(3), e0247320. https://doi.org/10.1371/journal.pone.0247320
Garba, M., Salleh, F., Hafiz, U. A., & Abu Bakar, N. M. (2022). Insurance literacy, risk knowledge management, risk-taking propensity and economic sustainability among SMEs: The moderating effect of financial inclusion. Journal of Social Economics Research, 9(2), 76–87.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd ed.). Thousand Oaks, CA: Sage Publications.
Hidayatillah, N., & Yasin, M. (2024). Strategi bisnis dan orientasi kewirausahaan pasar terhadap kreativitas UMKM di Surabaya. Jurnal Manajemen dan Kewirausahaan, 16(1), 45–57. https://journal.untar.ac.id/index.php/JMDK/article/view/17120
Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: A critical review. Journal of Business Venturing, 18(2), 165–187.
Hussain, J., Salia, S., & Karim, A. (2018). Is knowledge that powerful? Financial literacy and access to finance: An analysis of enterprises in the UK. Journal of Small Business and Enterprise Development, 25(6), 985–1001.
Huston, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296–316.
IS, R., Sriram, K. V., & Hungund, S. (2024). MSME/SME financial literacy: A systematic literature review and bibliometric analysis. Journal of the Knowledge Economy. https://doi.org/10.1007/s13132-024-02472-0
Joensuu-Salo, S., Sorama, K., Viljamaa, A., & Varamäki, E. (2018). Firm performance among internationalized SMEs: The interplay of market orientation, marketing capability and digitalization. Administrative Sciences, 8(3), Article 31. https://doi.org/10.3390/admsci8030031
Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization: How balanced scorecard companies thrive in the new business environment. Harvard Business School Press.
Khurram Rehman, & Md Aslam Mia. (2024). Determinants of financial literacy: a systematic review and future research directions. Future Business Journal, 10, Article 75.
Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1–18. https://doi.org/10.2307/1251866
Lekmat, L., Selvarajah, C., & Hewege, C. (2018). Relationship between market orientation, entrepreneurial orientation, and firm performance in Thai SMEs: The mediating role of marketing capabilities. International Journal of Business and Economics, 17(3), 213–237.
Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation. American Psychologist, 57(9), 705–717.
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44.
Mariam, S., Putra, A. H. P. K., Ramli, A. H., & Aryani, F. (2023). Analysis of the effect of debt level, market orientation, and financial literacy on microenterprise financial performance: The mediating role of consumer behaviour. At-Tasyri’, 6(2), 156–168. https://doi.org/10.57178/atestasi.v6i2.706
Mihardjo, R. P., & Ningtyas, M. N. (2023). Financial literacy, network competency, market orientation and financial performance: A study from Bandung SMEs. Diponegoro International Journal of Business, 6(1), 36–41. https://doi.org/10.14710/dijb.6.1.2023.36-41
Miran, M., Evinita, L. L., & Pesak, P. J. (2025). Factors affecting the financial performance of MSMEs in 3T (frontier, outermost, and underdeveloped) areas: The moderating role of financial literacy. Society, 13(1), 350–368. https://doi.org/10.33019/society.v13i1.802
Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the impact of entrepreneurial orientation on SMEs’ performance: The role of the financing structure. Procedia Economics and Finance, 23, 1649–1661. https://doi.org/10.1016/S2212-5671(15)00470-0
Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.
Octavia, A., Indrawijaya, S., Sriayudha, Y., Heriberta, Hasbullah, H., & Asrini. (2020). Impact of e-commerce adoption on entrepreneurial orientation and market orientation in business performance of SMEs. Asian Economic and Financial Review, 10(5), 516–525. https://doi.org/10.18488/journal.aefr.2020.105.516.525
Purnomo, M. N., Suryana, Y., & Suharnomo, S. (2022). Entrepreneurial orientation in micro and small enterprises of traditional food centers in Bandung, West Java. Binus Business Review, 13(3), 165–180. https://doi.org/10.21512/bbr.v13i3.5611
Putra, A., & Lestari, E. (2020). The resilience of youth entrepreneurship on SMEs’ performance in Indonesia. Journal of Entrepreneurship and Business, 8(1), 1–10.
Setiawan, I., & Raharja, S. (2021). Strategi Peningkatan Daya Saing UMKM Berbasis Inovasi dan Digitalisasi. Jurnal Manajemen dan Kewirausahaan, 23(1), 45–56. https://doi.org/10.9744/jmk.23.1.45-56
Sulaiman, N. (2016). The impact of financial knowledge and capabilities on SME firm performance in Australia [Doctoral dissertation, RMIT University]. RMIT Research Repository.
Wahyuni, S., & Silvya, A. (2022). Faktor-faktor yang mempengaruhi kinerja UMKM di Indonesia. Jurnal Ilmu Manajemen Terapan, 13(1), 45–59. https://doi.org/10.1234/jimt.v13i1.5678
Wales, W. J., Gupta, V. K., & Mousa, F. T. (2013). Empirical research on entrepreneurial orientation: An assessment and suggestions for future research. International Small Business Journal, 31(4), 357–383. https://doi.org/10.1177/0266242611418261
Wibisono, T., Anshori, M., & Hartanto, R. (2024). Market orientation, entrepreneurship orientation, and company performance: Study on SMEs furniture in Demak. Economic and Business Studies Journal (EBSJ), 12(2), 112–124. https://journals.usm.ac.id/index.php/ebsj/article/view/2240
Yakob, S., Yakob, R., B.A.M., H.-S., & Rusli, R. Z. A. (2021). Financial literacy and financial performance of small and medium-sized enterprises. The South East Asian Journal of Management, 15(1), 72–96. https://doi.org/10.21002/seam.v15i1.13117
Ye, J., & Kulathunga, K. M. M. C. B. (2019). How does financial literacy promote sustainability in SMEs? A developing country perspective. Sustainability, 11(10), 2990. https://doi.org/10.3390/su11102990.
Yusuf, A., & Soelaiman, L. (2023). Pengaruh keterampilan, orientasi pasar, dan jaringan usaha terhadap kinerja UMKM melalui kompetensi wirausaha. Jurnal Manajemen dan Kewirausahaan, 15(2), 76–88. https://journal.untar.ac.id/index.php/JMDK/article/view/17120
Zulfadhli, M., Ramadani, R., & Sari, M. (2024). The effect of financial literacy, access to capital, entrepreneurial orientation, and market orientation on the growth and sustainability of micro and small enterprises in Palembang. Jurnal Manajemen dan Riset Inovasi (MRI), 6(1), 1–14. https://prin.or.id/index.php/mri/article/view/3186
Adomako, S., & Danso, A. (2014). Financial literacy and firm performance: The moderating role of financial capital availability and resource flexibility. International Journal of Management & Organizational Studies, 3(4).
Adomako, S., Danso, A., & Damoah, J. O. (2016). The moderating influence of financial literacy on the relationship between access to finance and firm growth in Ghana. Venture Capital, 18(1), 43–61. https://doi.org/10.1080/13691066.2015.1079952
Ahmad, K. (2024). The influence of financial literacy, risk orientation and qualified accountants on performance in micro, small and medium enterprises: The mediating role of management accounting. International Review of Management and Marketing, 14(6), 317–324. https://doi.org/10.32479/irmm.17044
Aji, L. S., Hartanti, S., & Rahmawati, N. (2023). Pengaruh orientasi kewirausahaan, orientasi pasar, dan manajemen kualitas total terhadap kinerja UMKM di Karanganyar. Jurnal Ekonomi dan Pendidikan Indonesia (JUPE), 9(3), 190–201. https://ejournal.unesa.ac.id/index.php/jupe/article/view/51438
Ali, H., & Li, Y. (2021). Financial literacy, network competency, and SMEs financial performance: The moderating role of market orientation. Journal of Asian Finance, Economics and Business, 8(10), 341–352. https://doi.org/10.13106/jafeb.2021.vol8.no10.0341
Al-shami, S. A., Damayanti, R., Adil, H., Farhi, F., & Al Mamun, A. (2024). Financial and digital financial literacy through social media use towards financial inclusion among batik small enterprises in Indonesia. Heliyon, 10, e34902. https://doi.org/10.1016/j.heliyon.2024.e34902
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.
Bolton, D. L., & Lane, M. D. (2012). Individual entrepreneurial orientation: Development of a measurement instrument. Education + Training, 54(2/3), 219–233. https://doi.org/10.1108/00400911211210314
Bshayreh, M. M., Qassim, A. A., Qawqzeh, H. K., Al Dabbas, Y. J., & Alkarasneh, H. M. (2024). The moderating effect of financial literacy on the relationship between financial technology and firms’ performance. WSEAS Transactions on Business and Economics, 22, 659–669. https://doi.org/10.37394/23207.2025.22.66
Chin, W. W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern methods for business research (pp. 295–336). Mahwah, NJ: Lawrence Erlbaum Associates.
Dudi?, Z., Dudi?, B., Gregus, M., Novackova, D., & Djakovic, I. (2020). The Innovativeness and Usage of the Balanced Scorecard Model in SMEs. Sustainability, 12(8), 3221. https://doi.org/10.3390/su12083221
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of Management Review, 23(4), 660–679.
Fajarwati, D., Widyastuti, T., & Daito, A. (2025). Influences of accounting information system quality, financial innovation, and access to capital on SME performance: The moderating role of financial literacy. Pakistan Journal of Life and Social Sciences, 23(1), 7334–7345. https://doi.org/10.57239/PJLSS-2025-23.1.00569
Fan, M., Qalati, S. A., Khan, M. A. S., Shah, S. M. M., Ramzan, M., & Khan, R. S. (2021). Effects of entrepreneurial orientation on social media adoption and SME performance: The moderating role of innovation capabilities. PLOS ONE, 16(3), e0247320. https://doi.org/10.1371/journal.pone.0247320
Garba, M., Salleh, F., Hafiz, U. A., & Abu Bakar, N. M. (2022). Insurance literacy, risk knowledge management, risk-taking propensity and economic sustainability among SMEs: The moderating effect of financial inclusion. Journal of Social Economics Research, 9(2), 76–87.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (2nd ed.). Thousand Oaks, CA: Sage Publications.
Hidayatillah, N., & Yasin, M. (2024). Strategi bisnis dan orientasi kewirausahaan pasar terhadap kreativitas UMKM di Surabaya. Jurnal Manajemen dan Kewirausahaan, 16(1), 45–57. https://journal.untar.ac.id/index.php/JMDK/article/view/17120
Hoang, H., & Antoncic, B. (2003). Network-based research in entrepreneurship: A critical review. Journal of Business Venturing, 18(2), 165–187.
Hussain, J., Salia, S., & Karim, A. (2018). Is knowledge that powerful? Financial literacy and access to finance: An analysis of enterprises in the UK. Journal of Small Business and Enterprise Development, 25(6), 985–1001.
Huston, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296–316.
IS, R., Sriram, K. V., & Hungund, S. (2024). MSME/SME financial literacy: A systematic literature review and bibliometric analysis. Journal of the Knowledge Economy. https://doi.org/10.1007/s13132-024-02472-0
Joensuu-Salo, S., Sorama, K., Viljamaa, A., & Varamäki, E. (2018). Firm performance among internationalized SMEs: The interplay of market orientation, marketing capability and digitalization. Administrative Sciences, 8(3), Article 31. https://doi.org/10.3390/admsci8030031
Kaplan, R. S., & Norton, D. P. (2001). The strategy-focused organization: How balanced scorecard companies thrive in the new business environment. Harvard Business School Press.
Khurram Rehman, & Md Aslam Mia. (2024). Determinants of financial literacy: a systematic review and future research directions. Future Business Journal, 10, Article 75.
Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: The construct, research propositions, and managerial implications. Journal of Marketing, 54(2), 1–18. https://doi.org/10.2307/1251866
Lekmat, L., Selvarajah, C., & Hewege, C. (2018). Relationship between market orientation, entrepreneurial orientation, and firm performance in Thai SMEs: The mediating role of marketing capabilities. International Journal of Business and Economics, 17(3), 213–237.
Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation. American Psychologist, 57(9), 705–717.
Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44.
Mariam, S., Putra, A. H. P. K., Ramli, A. H., & Aryani, F. (2023). Analysis of the effect of debt level, market orientation, and financial literacy on microenterprise financial performance: The mediating role of consumer behaviour. At-Tasyri’, 6(2), 156–168. https://doi.org/10.57178/atestasi.v6i2.706
Mihardjo, R. P., & Ningtyas, M. N. (2023). Financial literacy, network competency, market orientation and financial performance: A study from Bandung SMEs. Diponegoro International Journal of Business, 6(1), 36–41. https://doi.org/10.14710/dijb.6.1.2023.36-41
Miran, M., Evinita, L. L., & Pesak, P. J. (2025). Factors affecting the financial performance of MSMEs in 3T (frontier, outermost, and underdeveloped) areas: The moderating role of financial literacy. Society, 13(1), 350–368. https://doi.org/10.33019/society.v13i1.802
Mason, M. C., Floreani, J., Miani, S., Beltrame, F., & Cappelletto, R. (2015). Understanding the impact of entrepreneurial orientation on SMEs’ performance: The role of the financing structure. Procedia Economics and Finance, 23, 1649–1661. https://doi.org/10.1016/S2212-5671(15)00470-0
Narver, J. C., & Slater, S. F. (1990). The effect of a market orientation on business profitability. Journal of Marketing, 54(4), 20–35.
Octavia, A., Indrawijaya, S., Sriayudha, Y., Heriberta, Hasbullah, H., & Asrini. (2020). Impact of e-commerce adoption on entrepreneurial orientation and market orientation in business performance of SMEs. Asian Economic and Financial Review, 10(5), 516–525. https://doi.org/10.18488/journal.aefr.2020.105.516.525
Purnomo, M. N., Suryana, Y., & Suharnomo, S. (2022). Entrepreneurial orientation in micro and small enterprises of traditional food centers in Bandung, West Java. Binus Business Review, 13(3), 165–180. https://doi.org/10.21512/bbr.v13i3.5611
Putra, A., & Lestari, E. (2020). The resilience of youth entrepreneurship on SMEs’ performance in Indonesia. Journal of Entrepreneurship and Business, 8(1), 1–10.
Setiawan, I., & Raharja, S. (2021). Strategi Peningkatan Daya Saing UMKM Berbasis Inovasi dan Digitalisasi. Jurnal Manajemen dan Kewirausahaan, 23(1), 45–56. https://doi.org/10.9744/jmk.23.1.45-56
Sulaiman, N. (2016). The impact of financial knowledge and capabilities on SME firm performance in Australia [Doctoral dissertation, RMIT University]. RMIT Research Repository.
Wahyuni, S., & Silvya, A. (2022). Faktor-faktor yang mempengaruhi kinerja UMKM di Indonesia. Jurnal Ilmu Manajemen Terapan, 13(1), 45–59. https://doi.org/10.1234/jimt.v13i1.5678
Wales, W. J., Gupta, V. K., & Mousa, F. T. (2013). Empirical research on entrepreneurial orientation: An assessment and suggestions for future research. International Small Business Journal, 31(4), 357–383. https://doi.org/10.1177/0266242611418261
Wibisono, T., Anshori, M., & Hartanto, R. (2024). Market orientation, entrepreneurship orientation, and company performance: Study on SMEs furniture in Demak. Economic and Business Studies Journal (EBSJ), 12(2), 112–124. https://journals.usm.ac.id/index.php/ebsj/article/view/2240
Yakob, S., Yakob, R., B.A.M., H.-S., & Rusli, R. Z. A. (2021). Financial literacy and financial performance of small and medium-sized enterprises. The South East Asian Journal of Management, 15(1), 72–96. https://doi.org/10.21002/seam.v15i1.13117
Ye, J., & Kulathunga, K. M. M. C. B. (2019). How does financial literacy promote sustainability in SMEs? A developing country perspective. Sustainability, 11(10), 2990. https://doi.org/10.3390/su11102990.
Yusuf, A., & Soelaiman, L. (2023). Pengaruh keterampilan, orientasi pasar, dan jaringan usaha terhadap kinerja UMKM melalui kompetensi wirausaha. Jurnal Manajemen dan Kewirausahaan, 15(2), 76–88. https://journal.untar.ac.id/index.php/JMDK/article/view/17120
Zulfadhli, M., Ramadani, R., & Sari, M. (2024). The effect of financial literacy, access to capital, entrepreneurial orientation, and market orientation on the growth and sustainability of micro and small enterprises in Palembang. Jurnal Manajemen dan Riset Inovasi (MRI), 6(1), 1–14. https://prin.or.id/index.php/mri/article/view/3186
Published
2025-11-30
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