Magnitude of digital adaptability role: Stakeholder engagement and costless signaling in enhancing sustainable MSME performance.

ABSTRACT

This study investigates the relationship between stakeholder engagement, costless signaling, digital adaptability, and sustainable performance in micro, small, and medium enterprises (MSMEs). A quantitative research approach was employed, collecting data through questionnaires from respondents who were owners or representatives of MSMEs. Statistical analysis was conducted to test the research hypotheses. The findings revealed a significant positive impact of stakeholder engagement and costless signaling on sustainable performance in MSMEs. However, digital adaptability did not moderate the relationship between costless signaling and sustainable performance. The implications of this study suggest that MSMEs should prioritize stakeholder engagement and employ effective costless signaling strategies to enhance their sustainable performance. Support from the government and financial institutions is also crucial in facilitating these efforts. The study has limitations in terms of generalizability, and further research is needed with a broader scope and more in-depth methods to deepen the understanding of the influence of digital adaptability in the context of MSMEs.