ENHANCING THE PERFORMANCE OF NEWLY ESTABLISHED MSMES THROUGH ENTREPRENEURIAL ORIENTATION AND DIGITALIZATION

This study examines the impact of entrepreneurial orientation, opportunity recognition, opportunity exploitation, and social media adoption on the performance of newly established MSMEs in West Java, Jakarta, and Lampung. Using a mixed-method approach, quantitative data from 523 MSMEs were analyzed with PLS-SEM, while in-depth interviews with six MSMEs explored financial literacy’s role in enhancing entrepreneurial orientation and business performance. The results confirm that entrepreneurial orientation significantly improves MSME performance by fostering innovation, risk-taking, and proactive strategies. It also enhances social media adoption, enabling businesses to expand market reach, strengthen brand positioning, and increase customer engagement. Opportunity recognition and exploitation further drive competitive advantage and market sustainability. Financial literacy plays a crucial role in optimizing resource allocation, risk management, and strategic investment decisions. Moreover, social media serves as both a marketing tool and a financial learning platform, supporting informed decision-making. This study contributes to entrepreneurial research by integrating financial literacy into entrepreneurial orientation, demonstrating its significance in strengthening MSME resilience and growth. Managerial implications emphasize the need for MSME leaders to foster entrepreneurial orientation, integrate digital strategies, and enhance financial literacy through targeted education programs. Policymakers should support MSMEs with financial and digital training initiatives to improve competitiveness. Limitations include the study’s focus on newly established MSMEs and reliance on self-reported data, suggesting future research on diverse business sizes, longitudinal analysis, and the effectiveness of digital financial tools.