The Effect of Intellectual Capital and Digital Literacy on Business Performance Through Innovation Capability in Halal SMEs in Malang City
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Muhammad Iqbal Fawwaz*
Heri Pratikto
Madziatul Chuiriyah
Enhancing the competitiveness of halal MSMEs in Malang City involves tapping into internal resources like intellectual capital and digital literacy, which have not been fully utilised. The hurdles in the way include managing human resources, internal processes, and client relationships, along with limited digital literacy that obstructs market reach and operational effectiveness. This research aims to examine the impact of Intellectual Capital and digital literacy on the performance of halal SMEs in Malang City, with innovation capability acting as an intermediary factor. The study follows a quantitative descriptive and explanatory approach using path analysis. Data was gathered through a Likert scale questionnaire from 222 halal SME participants associated with the Malang City Cooperative and SME Agency. Descriptive statistics and path analysis were carried out with the help of the most recent SPSS update. The research indicates that Halal SME actors in Malang City view intellectual capital, digital literacy, innovation capabilities, and business performance positively. Intellectual capital, digital literacy, and innovation capabilities are the key factors directly impacting business performance. Additionally, intellectual capital and digital literacy were found to indirectly enhance business performance through innovation capabilities as a mediator. The implications of these findings emphasize the importance of integrated development between knowledge management, technological literacy, and innovation capacity to enhance the competitiveness and sustainability of Halal SMEs.
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