HOW FINTECH INNOVATION AND DIGITAL FINANCE ACCESS DRIVE SME COMPETITIVENESS THROUGH FINANCIAL FLEXIBILITY AND INSTITUTIONAL QUALITY

Abstract

The purpose of this study is to investigate the influence of FinTech innovation and digital finance access on SME competitiveness while examining the mediating roles of financial flexibility and institutional quality. The study adopts a quantitative cross-sectional research design and collects survey data from managers and owners of manufacturing SMEs. Data are analyzed using structural equation modeling through SmartPLS to examine both direct and mediating relationships among the constructs. The findings indicate that FinTech innovation and digital finance access significantly enhance SME competitiveness. Furthermore, financial flexibility and institutional quality play important mediating roles in translating technological financial developments into competitive advantages for SMEs. The results highlight the importance of digital financial ecosystems and supportive institutional environments in strengthening SME performance. The study contributes to the literature on digital finance and SME development by providing an integrated framework that explains how technological financial systems and institutional conditions jointly influence SME competitiveness.