The Influence of Manager's Digital Literacy on SMEs' Digital Transformation in Indonesia: A Microfoundational Context

Abstract

The significance of digital transformation (DGT) for small- and medium-sized enterprises (SMEs), especially in the time of disruption, is frequently demonstrated by research. Nevertheless, not much consideration has been placed to how SMEs undergo DGT. In this article, we aim to examine how the DGT of SMEs will be affected by managers' digital literacy (MDL) from a microfoundation viewpoint. Utilizing survey data from 276 SMEs located in Indonesia, we also assess the mediating effect of digital-technology utilization (DTU) on the link between MDL and DGT, and the moderating effect of managers' features (such as age, educational level, and gender) on the link between MDL and DTU. The findings confirm that MDL affects DGT through DTU. Additionally, managers' age, educational level, and gender further influence the association between MDL and DTU. Our work is among initial endeavors to assess the DGT among SMEs in an emerging country, such as Indonesia. Outcomes, such as DTU and DGT, have not yet been examined in the literature on digital literacy. This work, however, adds to the understanding by emphasizing MDL as a force for the digital revolution.