Halal Business Sustainability Determinants: MSEs in East Java Faradilah Putri Fauzi, Syanisma Khansa Indirwan, Tika Widiastuti, Sulistya Rusgianto, Ririn Tri Ratnasari, Imron Mawardi, Mochammad Soleh
Airlangga University
Abstract
Purpose - This study aims to examine the determinants of halal business sustainability in micro and small enterprises (MSEs) in East Java, focusing on the role of financial literacy, digital literacy, and halal business management in enhancing dynamic capabilities and sustainability performance.
Methodology - A quantitative approach was used, with primary data collected from 80 respondents through an online questionnaire. The research employed Structural Equation Modeling - Partial Least Squares (SEM-PLS) for data analysis.
Findings - The results show that both financial and digital literacy significantly impact halal sustainability performance, with dynamic capabilities acting as a mediator in these relationships. Additionally, halal business management was found to have a significant positive effect on sustainability performance, emphasizing the importance of aligning business practices with Islamic principles.
Implications - This study provides valuable insights for universities and government institutions to enhance sustainability performance in MSMEs by promoting financial and digital literacy, alongside effective halal business management. The findings suggest that strengthening dynamic capabilities within MSMEs is crucial for adapting to market changes, fostering innovation, and achieving sustainability goals. Policymakers and educational institutions can play a significant role by developing programs to enhance these areas, supporting MSME growth and resilience.
Originality - This research contributes to the literature by exploring the impact of dynamic capabilities on MSME sustainability performance, particularly in relation to financial literacy, digital literacy, and halal business management. It highlights the importance of dynamic capabilities in enabling MSMEs to adapt, innovate, and stay competitive in the halal industry.
Keywords: Halal Business Sustainability, Micro and Small Enterprises (MSEs), Financial Literacy, Digital Literacy, Dynamic Capabilities.
Topic: Entrepreneurship and small medium entreprises
