Digital Transformation and Capital Access Drive Sectoral Economic Growth: Evidence from MSMEs in East Java Transformasi Digital dan Akses Modal Mendorong Pertumbuhan Ekonomi Sektoral: Bukti dari UMKM di Jawa Timur

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Vol. 3 No. 2 (2026): Contemporary Perspectives on Digital Transformation, Halal Economy, and Sustainable Development
Published: Aug 4, 2026
Keywords:
Digital_transformation,
Capital,
MSME,
Growth,
Sectoral Digital_transformation; Capital; MSME; Growth; Sectoral.

Main Article Content

Mochammad Rizki Ramadhani
Universitas Bali Internasional Muhammadiyah
Gede Andika
Department of Entrepreneurship, BIM University, Bali, Indonesia

Abstract

Digital transformation and access to capital are critical drivers of MSME economic growth, yet their combined regional level impact, particularly in East Java, remains insufficiently examined in the existing literature (Sayekti et al., 2024; Utomo et al., 2024). This study aims to empirically analyze the simultaneous influence of digital transformation and access to capital on the sectoral economic growth of MSMEs across 15 regencies/cities in East Java Province during the 2022 - 2024 observation period. Employing a quantitative approach with a balanced panel data framework, the dependent variable is defined as the growth rate of the MSME sectoral Gross Regional Domestic Product (GRDP), while the independent variables comprise the Digital Transformation Index (DTI) and the MSME Credit Ratio (CR), supplemented by MSME workforce growth (LG) and fixed capital investment (INV) as control variables. Model estimation was conducted using the Fixed Effects Model (FEM) and empirical results demonstrate that digital transformation exerts a positive and statistically significant effect on MSME economic growth. Similarly, access to capital produces a positive and significant effect. MSME workforce growth also contributes positively, whereas fixed capital investment shows no statistically significant effect within the study period. Collectively, the model accounts for 78.4% of the variation in MSME sectoral GRDP growth

Article Details

How to Cite
Ramadhani, M. R., & Andika, G. (2026). Digital Transformation and Capital Access Drive Sectoral Economic Growth: Evidence from MSMEs in East Java: Transformasi Digital dan Akses Modal Mendorong Pertumbuhan Ekonomi Sektoral: Bukti dari UMKM di Jawa Timur. Benefits: Journal of Economics and Tourism , 3(2), 316–331. https://doi.org/10.69836/benefits-jeti.v3i2.893
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