MULTIDIMENSIONAL DIGITAL TECHNOLOGY ADOPTION AND MSME PERFORMANCE IN NIGERIA: THE MEDIATING ROLE OF ENTREPRENEURIAL ORIENTATION AND THE MODERATING ROLE OF GOVERNMENT POLICY

Abstract

Digital technology adoption was promoted to boost MSME performance in developing economies, yet many Nigerian MSMEs showed weak results despite increased access. This study examined the structural links between multidimensional digital adoption and MSME performance, with entrepreneurial orientation (EO) as a mediator and government policy as a moderator, in Ondo State, Nigeria. Using a cross-sectional survey of 400 registered MSME owners and PLS-SEM, findings revealed that digital marketing tools significantly enhanced EO (β=0.227), financial (β=0.144), and non-financial performance (β=0.173). FinTech adoption strongly predicted EO (β=0.662) but negatively affected financial performance directly (β=−0.257), while positively influencing it indirectly through EO (β=0.261). EO improved financial (β=0.394) and non-financial performance (β=0.502). Government policy showed direct and mixed moderating effects. The model explained substantial variance (R²=0.621 financial; 0.575 non-financial). The study concluded that digital adoption alone did not guarantee MSME success; its value depended on EO and supportive policy.