THE INFLUENCE OF CEO’S DIGITAL LITERACY ON THE DIGITAL TRANSFORMATION OF SMEs IN INDONESIA

Abstract

The significance of digital transformation for small and medium-sized enterprises (SMEs), especially in the time of disruption, is frequently demonstrated by research. Nevertheless, not much consideration is placed on how digital transformation is experienced by SMEs. This study examines how SME digital transformation will be affected by CEOs’ digital literacy from a micro-foundation viewpoint. Utilizing survey data from 292 SMEs located in Indonesia, we evaluate a moderated mediation model. According to our research, CEOs’ digital literacy affects digital transformation through digital technology utilization. Additionally, CEOs’ gender further influence the association between CEOs’ digital literacy and digital technology utilization. Our work is among initial endeavors to assess the digital transformation among SMEs in an emerging nation such as Indonesia. Despite the urgent need for SMEs to digitally transform and the importance of CEOs’ digital capabilities in accelerating this process, none of the identified existing studies examines SME digital transformation from a micro-foundation perspective, specifically on the link between CEOs’ digital literacy and digital transformation and how digital technology utilization mediates this link, which makes this study unique.