THE EFFECT OF FRUGAL STRATEGY AND RISK MITIGATION ON THE SUSTAINABILITY OF MSMES WITH THE USE OF TECHNOLOGY AS A MODERATING VARIABLE

Luluk Mukarromah, Moh. Ubaidillah, Nik Amah

Abstract


This study aims to analyze the influence of frugal strategies and risk mitigation on the sustainability of MSMEs and to examine the role of information technology utilization as a moderating variable. This research approach is quantitative, using a survey method through the distribution of questionnaires to MSMEs in Madiun City, Madiun Regency, and Magetan Regency who have been operating their businesses for at least five years. Data analysis used Partial Least Squares (PLS) with the help of the SmartPLS 3 application. The results show that frugal strategy and risk mitigation have a positive and significant effect on the sustainability of MSMEs. Furthermore, the use of information technology has been shown to strengthen the relationship between frugal strategies and risk mitigation on the sustainability of MSMEs. This finding underscores the importance of frugal strategies and risk management supported by the use of information technology to ensure the sustainability of MSMEs in the digital era. This research has implications for MSMEs and the government in formulating policies that support digital transformation and business sustainability.

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