The Effect of Information Capital Readiness on East Java MSMEs Business Performance through Online Market Orientation as Mediation Variable Bambang Tjahjadi (a*), Noorlailie Soewarno (b), Gabriella Monica Gunawan (b)
a) Faculty of Economics and Business, Airlangga University Jalan Airlangga No. 4 sd 6 Surabaya 60286, Indonesia *bambang.tjahjadi[at]feb.unair.ac.id b) Faculty of Economics and Business, Airlangga University Jalan Airlangga No. 4 sd 6 Surabaya 60286, Indonesia
Abstract
The purpose of this study is to investigate whether information capital readiness (ICR) has a positive effect on business performance (BP). Furthermore, this study also investigates whether online market orientation (OMO) mediates ICR-BP relationship. This study is designed as a quantitative research and partial least squares structural equation modeling (PLS SEM) is used to test the hyphotheses. Online and offline questionnaires were conducted and collected from the MSMEs under the Dinas Koperasi and UMKM Provinsi Jawa Timur. This research uses a mediation model approach to test the indirect effect of OMO. The results indicate that ICR directly and positively affect BP of the MSMEs in East Java. Further analysis proves that OMO partially mediates ICR-BP relationship. This study suggests that MSMEs should have readiness in information capital and have online market orientation so it can improve business performance. This research specific context for East Java and caution should be used when generalizing it to other province. This study also limits the sample only in the MSMEs, therefore it limits its generalization. The results of this study suggest that MSMEs should have readiness in capital information to process transactional information, analyze information, and transform their business. This research brings together issues that are usually examined separately in previous studies. It employs a mediation research model to explore the central role of OMO in ICR-BP relationship which is rarely researched. This is also the first study exploring the three constructs of ICR, OMO, and BP in the East Java MSMEs research setting.
Keywords: MSMEs; Information Capital Readiness; Online Market Orientation; Business Performance
Topic: Management, Enterpreneurship, and Leadership
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