Factors Affecting Social Media Usage by MSMEs: Compatibility, Cost-Effectiveness, Interactivity, and Their Impact on MSMEs Performance

Abstract

This study aims to determine the compatibility, cost-effectiveness, and interactivity factors that influence the use of social media and its impact on the performance of fashion MSMEs in Yogyakarta City. The phenomenon that is the main focus of this research is business competition in Indonesia which continues to increase from year to year which requires MSMEs to continue to be able to maintain their existence and improve their performance. The development of innovation in technology also encourages MSMEs to be adaptive in order to continue to compete in fierce business competition. The method in the study uses descriptive and quantitative analysis. The population of this research is fashion MSMEs in Yogyakarta City. Data collection was carried out through distributing questionnaires via Google Forms which were distributed to 96 fashion MSMEs in Yogyakarta City. The method used to analyze the data uses Partial Least Square (SEM-PLS). The results of the analysis in this study indicate that: 1) compatibility has a positive and significant effect on the use of social media, 2) cost effectiveness has a positive effect on the use of social media, 3) interactivity has a positive and significant effect on the use of social media, 4) the use of social media has a positive effect on the performance of MSMEs.