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Local government backing boosts small business outcomes only when firms internalize digital skills; a Dompu survey finds digital capability mediates the link between perceived support and MSME performance.

Perceived Government Support on MSME Business Performance: The Mediating Role of Digital Capability
Aryani Aryani, Muh. Syahru Ramadhan, Fahrul Mauzu · August 17, 2026 · Advances in Management & Financial Reporting
openalex correlational low evidence 5/10 relevance Full text usable extracted full text DOI Source PDF

Structured author observations

Linked only from stored provider relations; the raw author line above is never matched by name.

OpenAlex

Latest observation:

  1. Aryani Aryani provider ID
  2. Muh. Syahru Ramadhan provider ID
  3. Fahrul Mauzu provider ID

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  1. Aryani Aryani provider ID
  2. M. Ramadhan provider ID
  3. Fahrul Mauzu provider ID
In a survey of 100 MSMEs in Dompu Regency, perceived government support is positively associated with both digital capability and firm performance, and digital capability significantly mediates the relationship between perceived support and performance according to PLS-SEM analysis.

Citation observations

Cumulative provider counts captured on specific dates; providers are never combined.

Purpose: This study aims to examine how perceived government support affects MSME performance, mediated by digital capability in Dompu Regency. Research Method: A quantitative approach was used, involving a survey of 100 MSME actors selected through purposive sampling. Primary data were analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM) via SmartPLS 4.0. Results and Discussion: The PLS-SEM analysis indicates that perceived government support significantly enhances both MSME performance and digital capability. Furthermore, digital capability positively affects performance and significantly mediates the relationship between government support and MSME performance. This demonstrates that external government support requires internal digital internalization to optimize business results. Implications: Theoretically, it extends the Resource-Based View by positioning digital capability as a strategic mechanism. Practically, it urges local policymakers to integrate digital competency training into MSME empowerment programs. Future studies should expand geographically and explore other moderating factors. Originality: This research uniquely positions digital capability as a mediator rather than an independent variable in a non-metropolitan context characterized by distinct gaps in digital infrastructure.

Assessment

Paper Typecorrelational Evidence Strengthlow — Small (N=100) purposive sample from a single non-metropolitan regency, cross-sectional self-reported data, and reliance on PLS-SEM mediation without strategies to address endogeneity, reverse causation, or common-method bias mean the study provides weak evidence for causal claims. Methods Rigorlow — Non-probability purposive sampling, small sample size for SEM, no reported pre-test of the questionnaire, limited detail on measurement reliability/validity or control variables, and no robustness or sensitivity analyses reported; standard econometric threats to inference are not addressed. SamplePrimary data from a purposive in-person (hardcopy) questionnaire administered to 100 MSME actors in Dompu Regency, West Nusa Tenggara, Indonesia; respondents active at least one year; measures adapted from prior studies; no pre-test reported. Themesadoption productivity skills_training governance IdentificationCross-sectional observational survey analyzed with PLS-SEM mediation; no exogenous variation, random assignment, temporal ordering, instrumental variables, or techniques to address endogeneity—causal language is based on mediation modelling only. GeneralizabilitySingle non-metropolitan regency in Indonesia — limited geographic external validity, Small non-random purposive sample — selection bias and limited population representativeness, Cross-sectional self-reported measures — vulnerable to common-method and reporting biases, Sectoral or firm-size heterogeneity not detailed — applicability across MSME types unclear, Findings pertain to 'digital capability' broadly and may not generalize to AI-specific impacts
Incomplete processing: Summary missing.

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