DOES PERFORMANCE IMPROVE SUSTAINABILITY? EMPIRICAL RESEARCH ON INDONESIAN MSMEs

Abstract

Micro, Small, and Medium Enterprises (MSMEs) are business sectors known to play an essential role in the economic growth of a country, especially in Indonesia. In this context, the creative industry is one of the fastest-growing business sectors and the promotion of sustainable economic development is evident in the government's active support for improving the growth of MSMEs. Therefore, this study analyzes the impact of financial literacy and market orientation on the MSMEs performance and sustainability. The sample includes 95 respondents occupying the roles of owners or managers in the creative industry of Yogyakarta Province. The results show that financial literacy and market orientation positively impact performance and sustainability. The performance of MSMEs influences business sustainability but financial literacy has no significant impact. Therefore, the implications show the indispensable need for governmental assistance in improving the knowledge base of MSMEs owners concerning financial literacy and market orientation.