Future-proofing MSMEs: an integrated model of digital, financial, and green capabilities

Micro, Small, and Medium Enterprises (MSMEs) play a vital role in economic development, employment generation, and business resilience. However, sustaining competitiveness in an increasingly digital and sustainability-oriented environment requires MSMEs to develop multiple organisational capabilities. Drawing upon the Resource-Based View and Dynamic Capability Theory, this study developed and validated an integrated capability model by examining the effects of technology adoption, financial literacy, and green intellectual capital on MSME sustainability across Indonesia, Japan, and Malaysia. Using a quantitative approach, survey data were collected from 360 MSME owners and managers and analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The results revealed that technology adoption, financial literacy, and green intellectual capital positively influenced MSME sustainability, with technology adoption emerging as the strongest predictor. Multi-group analysis indicated no significant differences across the three countries, suggesting that the proposed model was robust across diverse national contexts. This study contributes to the literature by providing cross-national evidence for an integrated capability framework that combines digital, financial, and sustainability capabilities in explaining MSME sustainability. The findings offer practical implications for policymakers and practitioners seeking to enhance the long-term sustainability and resilience of MSMEs in increasingly dynamic business environments.