Digital Financial Literacy, Digital Business Strategy, And Ai Innovation in Msmes: Performance Pathways and Implications for Sustainable Environmental Health Practices
DOI:
https://doi.org/10.35800/jip.v14i2.68882Keywords:
Artificial intelligence innovation, Digital business strategy, Digital financial literacy, Environmental health, MSME performanceAbstract
Digital transformation offers micro, small, and medium enterprises (MSMEs) opportunities to improve business performance while supporting more resource-efficient and environmentally responsible operations. This study examines the effects of digital financial literacy and digital business strategy on MSME performance, with AI innovation as a mediating variable. A quantitative cross-sectional design was employed using data from 100 MSME owners in Manado, North Sulawesi, Indonesia. The proposed relationships were tested using partial least squares structural equation modeling. The results show that digital financial literacy (β = 0.731, p < 0.001) and digital business strategy (β = 0.712, p < 0.001) significantly influence AI innovation. AI innovation has a strong positive effect on MSME performance (β = 0.843, p < 0.001) and partially mediates the effects of digital financial literacy (β = 0.616, p < 0.001) and digital business strategy (β = 0.601, p < 0.001) on performance. The model explains 68.3% of the variance in AI innovation and 75.6% of the variance in MSME performance. These findings indicate that AI innovation serves as an important mechanism through which digital capabilities enhance MSME performance. The results also suggest potential applications of AI for energy and water monitoring, inventory optimization, waste management, food safety, occupational health, and lower-emission distribution. However, these environmental health outcomes were not directly measured and should be interpreted as practical implications rather than confirmed effects.
Keywords: Artificial intelligence innovation; Digital business strategy; Digital financial literacy; Environmental health; MSME performance.
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Copyright (c) 2026 Steeva Y. L. Tumangkeng, Christoffel Mardy O. Mintardjo, Audie Olate Niode, Jeffry Leonard A. Tampenawas, Franda Benedicta Paat, Johan Reineer Tumiwa
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