Investigating the Influence of Financial Literacy and Supply Chain Management on the Financial Performance and Sustainability of SMEs

Abstract

The objective of this research is to examine the correlation between financial literacy and financial performance, the correlation between financial literacy and the sustainability of small and medium-sized enterprises (SMEs), and the correlation between supply chain management and financial performance. The relationship between supply chain management and the sustainability of small and medium-sized enterprises (SMEs), as well as the connection between financial success and the sustainability of SMEs. The research employed a quantitative survey approach, wherein data was collected by administering online questionnaires to 740 small and medium-sized enterprise (SME) owners in Indonesia. The user employed structural equation modeling (SEM) using SmartPLS 3.0 software tools for data analysis. The three steps of data analysis are validity, reliability, and significance tests. The sample approach employed is nonprobability sampling. The survey employed in this investigation utilizes the Google form, which was disseminated to participants. The measurement method for this questionnaire employs a 5-point Likert scale, consisting of the following categories: Strongly Disagree (STS), Disagree (TS), Neutral (N), Agree (S), and Strongly Agree (SS). The factors that were manipulated and controlled in this study are as follows: The study focuses on financial literacy and supply chain management as independent variables, whereas sustainability and financial performance are the dependent variables. The findings of this study demonstrate that financial literacy positively and significantly influenced financial performance and sustainability. Additionally, supply chain management also had a positive and significant impact on both financial performance and sustainability. Furthermore, financial performance was found to have a positive and significant effect on sustainability. The novelty of this research is in the discovery of a correlation model that establishes the relationship between the variables of financial literacy, supply chain management, financial performance, and sustainability in SMEs. This model was not before identified in any other research studies.

Keywords: Financial literacy Supply chain management financial performance Sustainability SMEs