The Effect of Digital Competencies on MSME Performance through Social Media Capability in Sumbawa Regency

Abstract

This study aims to analyze the influence of digital competencies on the performance of MSMEs with social media capability as a mediating variable in Sumbawa Regency, Indonesia. The research investigates how internal resources are converted into strategic capabilities to sustain business existence amid the dynamics of the digital economy. A quantitative approach with an explanatory research design was utilized in this research. Primary data were collected through online and offline questionnaires, using a non-probability purposive sampling technique, involving 170 respondents from MSMEs on social media. Data analysis was conducted using the Partial Least Squares Structural Equation Modeling (PLS-SEM) method. The results showed that digital competency positively and significantly affects social media capability and directly impacts MSME performance. Social media capability played a strong mediating role in connecting technical competency with business outcomes. Conversely, mastery of technology without supported strategic- social media management capabilities will not provide maximum impact on business profitability. The dominance of respondents in the culinary sector (73.7%) and the use of visual platforms such as Instagram (39.4%) highlight that the success of MSMEs in Sumbawa Regency greatly depends on responsive digital interaction capabilities. These findings reinforce the application of the Resource-Based View (RBV), in which digital competencies serve as a crucial intangible asset in creating competitive advantage. In practice, this research provides policymakers with guidance on prioritizing the strengthening of digital capacity to enhance the sustainable performance of MSMEs in the era of digital transformation.