“Pentagon capital and performance of Indonesian women entrepreneurs: The role of the adoption of digital technology”

Abstract

Pentagon capital is a term used to describe the five essential forms of capital: human, social, financial, physical, and intellectual. These five forms of capital play a crucial role in improving the performance of women entrepreneurs. Therefore, this study aims to analyze the effect of these five forms of capital on the performance of women entrepreneurs, both directly and indirectly, through the adoption of digital technology. The analysis was conducted in 38 regencies/cities located in East Java Province, Indonesia, and comprised 268 women entrepreneurs from various business sectors. Following this, the primary data source was collected through the distribution of questionnaires, and the partial least squares structural equation modeling (PLS-SEM) was utilized to assess both the direct and indirect effects of the observed capitals using SmartPLS 4.0 software. The results showed that only social capital had a direct and significant effect on the performance of women entrepreneurs. However, human, financial, physical, and intellectual capital were found to significantly affect the performance of entrepreneurs indirectly through the mediation of the adoption of digital technology. It is also expedient to acknowledge that among the observed variables, financial capital was found to be the most important (19%). These results offered practical understanding for women entrepreneurs on strategies to increase their business income and access loans from financial institutions and government assistance.