Integrating Digital Transformation, Business Resilience, and Sustainable Financial Behaviour for MSME Competitive Advantage

Economic resilience at the national level must rely on the strategic role of micro, small, and medium enterprises (MSMEs), especially when facing global market volatility. Although new regulations in Indonesia have encouraged digital transformation and responsible business practices, low digital and financial literacy, limited access to financing, and weak tax compliance still limit the competitiveness of MSMEs. Thus, this study is written to develop an integrative model that positions digital competence (DCC) and social capital networks (SCN) as internal factors of competitive advantage (CA), with business resilience (BRC) acting as a mediator in explaining CA achievement. On the other hand, sustainable financial behaviour, accounting practices, and public policy support act as external factors that strengthen legitimacy, increase transparency and expand access to formal finance. This framework uses a literature synthesis to expand the resource-based view (RBV) and dynamic capabilities theory by introducing a dimension of financial sustainability that has not been widely discussed in MSME studies. The results indicate that the competitive advantages of MSMEs can be strengthened through a synergy of complementary internal and external factors. The main contribution of this research lies in the integration of sustainable financial behaviour into the conceptual model. This work also provides directions for future empirical research and a practical foundation for the Indonesian government, financial institutions, and MSMEs in strengthening the resilience of the economy and businesses around the nation.