The Role of Financial Access, Digital Literacy, and Innovation in Enhancing the Competitiveness of MSMEs in South Kalimantan

Abstract

This study aims to analyze and empirically measure the impact of Financial Access, Digital Literacy, and Innovation on the Competitive Advantage of Micro, Small, and Medium Enterprises (MSMEs) in South Kalimantan Province. Amidst the regional economic dominance of the capital-intensive mining sector, strengthening MSME competitiveness serves as a foundational pillar for sustainable and inclusive economic growth. Employing a quantitative approach, this research utilized Multiple Linear Regression analysis via SPSS 25 software. Data were gathered through structured hybrid questionnaires distributed proportionally across various regencies and cities, with a total of 100 valid MSME respondents determined using the Slovin formula. The classical assumption tests including normality, multicollinearity, and heteroscedasticity tests confirmed that the regression model was stable and valid for parametric statistical analysis. The simultaneous F test results demonstrated that financial access, digital literacy, and innovation collectively exert a significant influence on MSME competitiveness. However, partial t test evaluation revealed distinct dynamics among the variables. Financial Access and Digital Literacy did not significantly affect MSME competitiveness individually, as local enterprises still face structural constraints in formal financing and optimized technology adoption. In contrast, Innovation emerged as the sole dominant and highly significant driver of competitive advantage. These findings suggest that regional policy interventions should heavily prioritize fostering product, process, and operational innovation to unlock optimal competitive capabilities among local MSMEs and support regional economic development.