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Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City

Muhammad Rakib; Andika Isma; Hajar Dewantara; Dian Anugrah Sanusi

Abstract

This study aims to analyze the influence of digital literacy and sustainable business practices on the sustainability of Micro, Small, and Medium Enterprises (MSMEs) in the culinary sector in Makassar City, with competitive advantage as a mediating and moderating variable. This study is motivated by the increasing demands for technological adaptation and sustainable practices in maintaining the existence of MSMEs in the digital economy era. A quantitative approach was used with a survey method of 215 culinary MSMEs. Data analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the relationship between variables. The results show that digital literacy has a positive and significant effect on the sustainability of MSMEs, both directly and indirectly through competitive advantage. Sustainable business practices have also been shown to strengthen sustainability performance through increased operational efficiency and social reputation. In addition, competitive advantage moderates the relationship between digital literacy and sustainability, where the effect of digital literacy is stronger in MSMEs with high competitiveness. These findings emphasize the importance of synergy between digital capabilities, sustainability orientation, and competitive strategy to create inclusive, adaptive, and sustainable culinary business growth in the digital era.

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Studies Management and Finance Economics, of Journal 0504-2644 (online): ISSN 0490,-2644 (print): ISSN 5202 November 11 Issue 80 Volume 8.317 Factor: Impact ,38-i11-10.47191/jefms/v8 DOI: Article 5057-7488 No: Page JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7488 Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City Muhammad Rakib*1, Andika Isma2, Hajar Dewantara3, Dian Anugrah Sanusi4 1,2,3Department of Business and Entrepreneurship, Faculty of Economics and Business, Universitas Negeri Makassar, Indonesia 4Business Administration Study Program, Faculty of Social and Political Sciences, Universitas Satya Wiyata Mandala, Indonesia ABSTRACT. This study aims to analyze the influence of digital literacy and sustainable business practices on the sustainability of Micro, Small, and Medium Enterprises (MSMEs) in the culinary sector in Makassar City, with competitive advantage as a mediating and moderating variable. This study is motivated by the increasing demands for technological adaptation and sustainable practices in maintaining the existence of MSMEs in the digital economy era. A quantitative approach was used with a survey method of 215 culinary MSMEs. Data analysis was conducted using Partial Least Squares Structural Equation Modeling (PLS-SEM) to test the relationship between variables. The results show that digital literacy has a positive and significant effect on the sustainability of MSMEs, both directly and indirectly through competitive advantage. Sustainable business practices have also been shown to strengthen sustainability performance through increased operational efficiency and social reputation. In addition, competitive advantage moderates the relationship between digital literacy and sustainability, where the effect of digital literacy is stronger in MSMEs with high competitiveness. These findings emphasize the importance of synergy between digital capabilities, sustainability orientation, and competitive strategy to create inclusive, adaptive, and sustainable culinary business growth in the digital era. KEYWORDS: Digital Literacy, Sustainable Business Practices, Competitive Advantage, MSME Sustainability, Culinary Business I. INTRODUCTION Micro, small, and medium enterprises (MSMEs) in the culinary industry are crucial to the global economy, particularly in developing countries. In addition to providing numerous jobs, this industry supports regional income, product innovation, and the preservation of cultural heritage through culinary diversity (Rakib et al., 2024; Ervani et al., 2024; Nurlina et al., 2023) . However, culinary MSMEs frequently face a number of challenges that can threaten their business continuity, such as intense competition, shifting consumer tastes, fluctuating raw material prices, and limited access to resources (Aji, 2023; Sufa et al., 2024) . The rapid advancement of digital technology and growing awareness of sustainability issues have significantly transformed the global corporate landscape in recent years. MSMEs now have additional options for expanding their customer base, improving operational effectiveness, and accessing new markets thanks to the digital era (Ervani et al., 2024; Rahmanto, 2024) . However, MSMEs must have an adequate level of digital literacy, including the capacity to use digital technology wisely and effectively, in order to take advantage of this opportunity (Sufa et al., 2024; Nurlina et al., 2023) . Digital literacy includes the ability to find, assess, use, and exchange information in an ethical and efficient manner in addition to the ability to use digital devices and applications (Aji, 2023; Sufa et al., 2024; Rahmanto, 2024) . Digital literacy for culinary MSMEs includes the use of social media for marketing, e-commerce for sales, mobile applications for ordering and delivery, and data analysis tools to understand client behavior and improve company tactics (Ervani et al., 2024; Nurlina et al., 2023) . Unfortunately, many culinary MSMEs still struggle to compete in the digital market due to low levels of digital literacy, particularly in developing countries (Aji, 2023; Rahmanto, 2024) . In addition to digital literacy, sustainable business practices are becoming increasingly important for the long-term survival of MSMEs in the culinary industry. Consumers are becoming more concerned about sustainability issues and prefer companies that are socially and environmentally responsible (Sufa et al., 2024) . Sustainability is not just about protecting the environment; it is also about creating long-term economic and social value (Nurlina et al., 2023) . Sustainable business practices encompass a range of initiatives, such Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7489 as the use of local and organic raw materials, reducing food waste, energy efficiency, fair labor practices, and supporting local communities. Thus, culinary MSMEs can enhance their brand image, attract new clients, and increase customer loyalty by using sustainable business practices (Nurlina et al., 2023) . For culinary MSMEs to thrive in the face of increasingly fierce competition, they must have their own competitive edge. Many factors, including product quality, competitive pricing, exceptional customer service, product innovation, and brand differentiation, can provide a competitive advantage (Wibowo et al., 2023) . Through the use of digital technologies, such as personalized marketing, consumer data analysis, or the creation of creative mobile applications, culinary MSMEs can also gain a competitive advantage in the digital era (Ervani et al., 2024) . Moreover, as more and more customers seek out socially and ecologically conscious companies, sustainable business practices can also provide a competitive advantage (Nurlina et al., 2023) (Sufa et al., 2024) . Numerous studies have shown that competitive advantage, sustainable business practices, and digital literacy all improve the performance of MSMEs (Ervani et al., 2024; Nurlina et al., 2023) . The impact of these characteristics on the sustainability of culinary MSMEs, especially in developing countries, has not been well researched, although (Aji, 2023; Rahmanto, 2024) . In addition, current research often ignores the interactions between these factors and only concentrates on one or two factors. Therefore, by examining in-depth the impact of digital literacy, sustainable business practices, and competitive advantage on the sustainability of culinary MSMEs, this study seeks to close this gap. MSMEs in the culinary industry must be actively involved in initiatives such as training to improve their online or digital business capabilities. 1 Post the global Covid-19 pandemic, digital and financial literacy of culinary MSMEs has become a catalyst for economic recovery (Rahmanto, 2024) . It is important to conduct research on MSME sustainability, particularly related to digital literacy, sustainable business practices, and competitive advantage in the culinary industry in Makassar City. This can contribute significantly to the MSME economy both at the local and national levels. The main problem in this research is how digital literacy, sustainable business practices, and competitive advantage interact to influence the sustainability of culinary MSMEs. Digital literacy has become a major focus in research on MSMEs in the digital era. Digital literacy is the foundation for MSME growth in the digital era. Research highlights that businesses with strong digital capabilities are more likely to succeed in online marketing, customer engagement, and process automation (Wayan Sri Maitri, Komang Widhya Sedana Putra, Kadek Wulandari Laksmi, 2024; Noor & Sriyono, 2024) . For example, a study in Bali found that social media innovation significantly improves business sustainability when moderated by high levels of digital literacy. Another study concluded that digital literacy increases productivity by enabling MSMEs to optimize social media for marketing strategies (Ervani et al., 2024) . Sustainability is no longer an option but a necessity for businesses seeking long-term success. Key findings include: Sustainable practices such as waste reduction and energy efficiency contribute to cost savings while enhancing brand image.4 Green intellectual capital and organizational culture also play a crucial role in ensuring business continuity (Surjadi et al., 2024) . Competitive advantage allows a business to differentiate itself in a competitive market: Research shows that intangible assets such as innovation capabilities are critical to maintaining a competitive position3. Competitive strategies rooted in differentiation or cost leadership can increase resilience to market disruptions (Asytuti et al., 2024) . Integration of Factors. Recent studies have shown that combining these elements—digital literacy, sustainability, and competitive advantage—will create synergies that strengthen the impact of each element: Digital transformation supported by knowledge sharing will improve human resource development and business sustainability.8 Digital literacy acts as a moderating variable that strengthens the impact of other strategic initiatives on business outcomes (Surjadi et al., 2024) . This research offers novelty by integrating three important variables into one comprehensive study. It not only examines the influence of each variable separately but also explores the interaction between digital literacy and sustainable business practices and their impact on competitive advantage. II. MATERIALS & METHODS This study uses a quantitative approach to analyze the influence of digital literacy, sustainable business practices, and competitive advantage on the sustainability of MSMEs. A quantitative approach was chosen because it allows for objective measurement and statistical analysis of the data obtained. The population in this study is all MSMEs operating in the culinary sector registered with the Makassar City Tourism Office. The sample will be taken using a random sampling method, where respondents are selected based on certain criteria such as: a) Having a business that has been operating for at least one year, b) Using digital technology in business operations, and c) Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7490 Implementing sustainable business practices. The sample size is 215 respondents, which is considered sufficient for valid statistical analysis. This study employed a causal research design with a cross-sectional approach . This design was chosen because it allows for testing the causal relationship between digital literacy, sustainable business practices (independent variables), competitive advantage (mediator variable), and MSME sustainability (dependent variable). The main instrument in this study is a questionnaire containing statements measuring the research variables. The questionnaire will be structured on a 5-point Likert scale (1 = Strongly Disagree, 5 = Strongly Agree). The questionnaire will be tested for validity and reliability before being used for data collection. Data was collected through a survey using a questionnaire distributed online (e.g., via Google Forms) to a sample of culinary business owners. The collected data will be analyzed using descriptive statistical analysis techniques and path analysis. III. RESULTS AND DISCUSSION A. RESULT 1. Respondent Characteristics Table 1. Respondent Characteristics Based on Gender No Gender Frequency Percentage (%) 1 Man 59 27.2 2 Woman 156 71.9 Amount 215 100 Source: Research Questionnaire Instrument, processed 2025. Table 1 shows that of the 215 respondents, 156 (71.9%) were female, followed by 59 (27.2%). These findings indicate that women play a dominant role in MSME activities, particularly in home-based, creative, and local service-based sectors such as culinary, crafts, and small trade. This demonstrates that women's entrepreneurship is a crucial factor in supporting the economic sustainability of families and local communities. Table 2. Respondent Characteristics Based on Age No Respondent Age Frequency Percentage (%) 1. < 20 years 13 6.0 2. 20 – 30 years 155 71.4 3. 31-40 years old 18 8.3 4. > 40 years 29 13.4 Amount 215 100 Source: Research Questionnaire Instrument, processed 2025 Based on Table 2, it can be seen that of the 215 respondents, the majority were respondents in the age group under 20 years with a total of 13 respondents or 6.0 percent, followed by the age group of 20 to 30 years with 155 people or 71.4 percent, then the age group of 31-40 years with 18 people or 8.3 percent and the age group above 40 years also with 29 people or 13.4 percent. The majority of respondents were in the productive age (20-30 years), which is a positive indicator for the sustainability of MSMEs. The younger generation has great potential in driving innovation, digitalization, and business competitiveness. However, to ensure long-term sustainability, there needs to be synergy between the enthusiasm of the younger generation and the experience of the older generation, as well as ongoing support from educational institutions, the government, and financial institutions. Table 3. Respondent Characteristics Based on Product Type No Types of products Frequency Percentage (%) 1. Snack 48 22.1 2. Trendy Drinks 53 24.4 3. Frozen Food 12 5.5 4. Processed Foods 78 35.9 Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7491 5. Bread and Cake 24 11.1 Amount 215 100 Source: Research Questionnaire Instrument, processed 2025 Based on Table 3, it can be seen that of the 215 respondents, the dominant type of processed food business is a business that sells chicken-based menus, meat, noodles, fried rice, and others, amounting to 78 or 35.9 percent, then the least Frozen Food business such as sausages, nuggets, meatballs, and dim sum that are ready to be processed at home, the number is only 12 respondents with 5.5 percent. This distribution reflects that processed food businesses in Makassar City, which are generally culinary businesses in the field of processed food and are easy to run by micro-entrepreneurs. Table 4. Respondent Characteristics Based on Length of Business No Length of Business Frequency Percentage (%) 1 < 1 year 14 6.5 2 15 years 162 74.7 3 6 – 10 years 22 10.1 4 >10 years 17 7.8 Amount 215 100 Source: Research Questionnaire Instrument, processed 2025. Based on Table 4, it can be seen that the most common length of business is between 1 and 5 years. This is evidenced by the results of a survey of 215 respondents, with 74.7 percent choosing the length of business. This distribution indicates that the majority of MSMEs are still in the development and stabilization stage, which is a crucial phase in determining long-term business sustainability. 2. Data Presentation and Analysis a. Descriptive Analysis Analysis was carried out on the minimum, maximum, average and standard deviation value parameters for each indicator and the total value of the variable. 1) Digital Literacy The descriptive digital literacy variable includes four indicators. The indicators and questionnaire results can be seen in the table below. Table 5. Descriptive Statistics on Digital Literacy Variables Variables/Indicators N Range Min Max Mean Std. Access capabilities 215 12 3 15 12.73 2,265 Evaluation skills 215 12 3 15 12.50 2,273 Ability to use 215 12 3 15 12.21 2,515 Participants in the training 215 12 3 15 11.52 2,838 Digital Literacy 215 48 12 60 48.96 9,000 Source: Research Questionnaire Instrument, processed 2025. Table 5 shows that digital literacy is supported by access, evaluation, use, and participation in training. Overall, the statistics indicate that MSMEs have a high level of digital literacy, particularly in terms of technology access, evaluation, and use. This is a positive indicator for MSME sustainability, as digital literacy strengthens adaptability, innovation, and business efficiency. 2) Sustainable Business Practices The descriptive variables for sustainable business practices include four indicators. The indicators and questionnaire results are shown in the following table. Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7492 Table 6. Descriptive Statistics on Sustainable Business Practices Variables/Indicators N Range Min Max Mean Std. use of resources 215 12 3 15 12.50 1,977 Corporate social responsibility 215 12 3 15 12.42 2,047 Sustainable product innovation 215 12 3 15 12.34 2,067 Sustainability certification 215 12 3 15 12.60 1,810 Sustainable Business Practices 215 48 12 60 49.87 7,184 Source: Research Questionnaire Instrument, processed 2025. Table 6 shows that sustainable business practices are supported by efficient resource use, corporate social responsibility, sustainable product innovation, and sustainable certification. Overall, the statistical results indicate that MSMEs have implemented sustainable business practices effectively. The high average scores for efficiency, innovation, and certification indicate a shift in mindset from simply seeking profit to long-term business sustainability. This indicates that MSMEs are not only drivers of the local economy but also agents of change toward sustainable development. To strengthen this, support in the form of green business training, certification incentives, and sustainable innovation mentoring is needed so that sustainable business practices become more institutionalized in MSME activities. 3) Competitive Advantage The descriptive variables of competitive advantage include 4 indicators which can be seen in the table below. Table 7. Descriptive Statistics on Competitive Advantage Variables/Indicators N Range Min Max Mean Std. Product quality 215 12 3 15 12.85 1,700 Service differentiation 215 12 3 15 12.43 1,882 Customer satisfaction 215 12 3 15 12.80 1,994 Market share 215 12 3 15 12.45 1,868 Competitive Advantage 215 48 12 60 50.53 6,658 Source: Research Questionnaire Instrument, processed 2025. Based on Table 7, the total average value of the competitive advantage variable is 50.53 out of a maximum score of 60, indicating that MSMEs have a high level of competitive advantage. A high average value for each indicator indicates that MSMEs have a solid competitive advantage, particularly in terms of product quality and customer satisfaction. This advantage is a crucial factor in supporting business sustainability, as MSMEs that are able to provide added value to consumers will have a strong market position and long-term growth prospects. Thus, competitive advantage is not only the result of economic efficiency, but also of innovative strategies, quality services, and a focus on customer satisfaction, which are at the core of MSME sustainability. 4) Sustainability of MSMEs The descriptive variables for MSME sustainability include four indicators. The indicators and questionnaire results are shown in the table below. Table 8. Descriptive Statistics on MSME Sustainability Variables/Indicators N Range Min Max Mean Std. Revenue growth 215 12 3 15 12.45 1,888 Operational stability 215 12 3 15 12.52 1,800 Market resilience 215 12 3 15 12.34 1,928 Community involvement 215 12 3 15 12.22 1,921 Sustainability of MSMEs 215 48 12 60 49.53 6,697 Source: Research Questionnaire Instrument, processed 2025. Based on the table above, the average total value of the MSME sustainability variable is 49.53, indicating that the level of sustainability of MSME businesses is in the high category. This indicates that most MSMEs have been able to maintain their business continuity through various aspects such as revenue, operational stability, market resilience, and social engagement. Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7493 Overall, the results in Table 8 indicate that MSMEs have a high level of sustainability, with operational stability and revenue growth as key strengths. This reflects the ability of MSMEs to manage their businesses adaptively and socially responsibly. Efforts to improve sustainability can continue by strengthening innovation capacity, digital literacy, and community partnerships, enabling MSMEs to survive and grow amidst a dynamic business environment. b. Path Analysis 1) Measurement Model Analysis (Outer Model) In this study, data analysis used the Partial Least Squares (PLS) approach. PLS is a structural equation modeling (SEM) model based on components or variants. The path diagrams for the outer and inner models in this study are depicted as follows. Figure 1. Outer Model and Inner Model . The criteria for using Smart PLS 4 data analysis techniques to assess the outer model include convergent validity, discriminant validity, composite reliability, and Cronbach's alpha. For the inner model, bootstrapping was used to obtain statistical T-test parameters to predict causality. Analysis of the measurement model analysis model or outer model uses two stages of testing, including: 1) Validity and Reliability of the Construct a. Discriminant Validity (1) Construct reliability and validity Convergent validity is the loading factor value on the latent variable and its indicators . Table 9. Outer Loading Digital Literacy Sustainable Business Practices Competitive Advantage Sustainability of MSMEs X1.0 0.822 X1.1 0.799 X1.10 0.785 X1.11 0.801 X1.12 0.806 X1.2 0.780 X1.3 0.837 X1.4 0.801 X1.5 0.833 X1.6 0.891 Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7494 Digital Literacy Sustainable Business Practices Competitive Advantage Sustainability of MSMEs X1.7 0.848 X1.8 0.904 X2.1 0.694 X2.10 0.824 X2.11 0.863 X2.12 0.824 X2.2 0.750 X2.3 0.780 X2.4 0.697 X2.5 0.805 X2.6 0.856 X2.7 0.830 X2.8 0.750 X2.9 0.752 X3.1 0.839 X3.10 0.845 X3.11 0.829 X3.12 0.767 X3.2 0.834 X3.3 0.853 X3.4 0.846 X3.5 0.725 X3.6 0.748 X3.7 0.815 X3.8 0.798 X3.9 0.816 Y1 0.724 Y10 0.768 Y11 0.740 Y12 0.732 Y2 0.803 Y3 0.850 Y4 0.811 Y5 0.813 Y6 0.863 Y7 0.847 Y8 0.840 Y9 0.852 Source: Smart PLS 3 Processed Results, 2025. the outer loading factor values for all indicators are above 0.7, there is a value of 0.6, but there are experts who say that this value is still considered valid, so it is concluded that all indicators have met the requirements for convergent validity. and valid indicators to be used in measuring the four research variables. Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7495 (2) Discriminant Validity The following are the results of the calculation or testing of Discriminant Validity. Table 10. Discriminant Validity (Cross Loading) Digital Literacy Sustainable Business Practices Competitive Advantage Sustainability of MSMEs X1.0 0.822 0.490 0.510 0.439 X1.1 0.799 0.527 0.463 0.350 X1.1 0 0.785 0.528 0.439 0.485 X1.1 1 0.801 0.493 0.421 0.389 X1.1 2 0.806 0.520 0.416 0.423 X1.2 0.780 0.484 0.442 0.364 X1.3 0.837 0.513 0.504 0.433 X1.4 0.801 0.570 0.609 0.457 X1.5 0.833 0.632 0.549 0.515 X1.6 0.891 0.542 0.501 0.447 X1.7 0.848 0.558 0.546 0.467 X1.8 0.904 0.587 0.569 0.476 X2.1 0.398 0.694 0.544 0.490 X2.1 0 0.534 0.824 0.726 0.619 X2.1 1 0.525 0.863 0.661 0.582 X2.1 2 0.500 0.824 0.620 0.560 X2.2 0.477 0.750 0.604 0.515 X2.3 0.691 0.780 0.698 0.639 X2.4 0.501 0.697 0.467 0.512 X2.5 0.472 0.805 0.577 0.612 X2.6 0.496 0.856 0.616 0.623 X2.7 0.516 0.830 0.635 0.573 X2.8 0.580 0.750 0.552 0.544 X2.9 0.448 0.752 0.517 0.494 X3.1 0.474 0.647 0.839 0.649 X3.1 0 0.575 0.654 0.845 0.718 X3.1 1 0.576 0.722 0.829 0.679 X3.1 2 0.500 0.630 0.767 0.636 X3.2 0.458 0.616 0.834 0.661 X3.3 0.478 0.673 0.853 0.653 X3.4 0.517 0.670 0.846 0.704 X3.5 0.477 0.534 0.725 0.617 X3.6 0.535 0.568 0.748 0.604 X3.7 0.421 0.605 0.815 0.593 X3.8 0.410 0.557 0.798 0.600 X3.9 0.466 0.586 0.816 0.603 Y1 0.398 0.538 0.542 0.724 Sustainability of MSMEs: An Empirical Study of Digital Literacy, Sustainable Business Practices, and Competitive Advantage in Culinary Businesses in Makassar City JEFMS, Volume 08 Issue 11 November 2025 www.ijefm.co.in Page 7496 Digital Literacy Sustainable Business Practices Competitive Advantage Sustainability of MSMEs X1.0 0.822 0.490 0.510 0.439 Y10 0.376 0.557 0.606 0.768 Y11 0.490 0.513 0.570 0.740 Y12 0.541 0.515 0.536 0.732 Y2 0.432 0.592 0.622 0.803 Y3 0.484 0.666 0.714 0.850 Y4 0.422 0.604 0.687 0.811 Y5 0.345 0.546 0.649 0.813 Y6 0.442 0.608 0.676 0.863 Y7 0.406 0.582 0.654 0.847 Y8 0.418 0.574 0.686 0.840 Y9 0.419 0.634 0.707 0.852 Source: Smart PLS 3 Processed Results, 2025. Based on the data above, the cross-loading values for all construct indicators are greater than 0.700, meaning each indicator is valid and has passed discriminant validity . However, some experts argue that 0.6 is still considered valid. According to Fornell and Larkell, if the square root value of the Average Variance Extracted (AVE) of each variable is greater than the correlation value between the variable and other variables in the model, then the model is said to have good discriminant validity. Table 11. Fornel-Lacker Criterion Values Digital literacy Sustainable business practices Competitive advantage Sustainability of MSMEs Digital Literacy 0.827 Sustainable Business Practices 0.653 0.787 Competitive Advantage 0.608 0.770 0.811 Sustainability of MSMEs 0.533 0.720 0.796 0.805 Source: Smart PLS 3 Processed Results, 2025. The results of the Fornell-Lacker Criterion show that the lowest value is digital sustainable entrepreneurship at 0.818 and the highest value is digital competence at 0.666. (3) Construct Reliability To measure the internal consistency of a measuring instrument in PLS, a reliability test is used. According to (Sugiyono, 2019), this is measured using three criteria: Cronback's Alpha (CA), Composite Reliability (CR), and Average Variance Extracted (AVE). The following presents the composite reliability values for each variable. Table 12 . Composite Reability Variables Composite Reliability Digital Literacy 0.963 Sustainable Business Practices 0.951 Competitive Advantage 0.958 Sustainability of MSMEs 0.957 Source: Smart PLS 3 Processed Results, 2025. Based on the data presented in Table 12, it can be concluded that all constructs have met the reliability criteria, as evidenced by composite reliability values greater than 0.9. All indicators consistently measure the five variables. 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The Role of Digital Literacy in Moderating the Effect of Entrepreneurial Orientation and Market Orientation on Business Sustainability in the Culinary Sector MSMEs in Surabaya. International Journal of Social Science Research and Reviews , 6 (12), 274–288. https://doi.org/http://dx.doi.org/10.47814/ijssrr.v6i12.1797 Abstract