Determinants of Digital Business Transformation among Halal Entrepreneurs in Indonesia

Samsul Irawan; Muzani Afkar; Haerul Fahmi

Authors

Samsul Irawan Department of Sharia Economics, Universitas Islam Negeri Mataram, Mataram, Indonesia
Muzani Afkar Department of Sharia Business Management, Universitas Negeri Padang, Padang, Indonesia
Haerul Fahmi Department of Sharia Business Management, Universitas Islam Al-azhar, Mataram Indonesia

Keywords:

digital business transformation, halal entrepreneurs, digital capability, islamic business ethics, digital ecosystem development

Abstract

Digital business transformation has become a strategic priority for enhancing the competitiveness and sustainability of halal enterprises in Indonesia. However, many halal entrepreneurs continue to face challenges in adopting and integrating digital technologies due to limited technological capability, organizational readiness, financial resources, and institutional support. This study examines the determinants of digital business transformation among halal entrepreneurs by developing an integrated framework incorporating technological, organizational, financial, institutional, and ethical dimensions. A quantitative explanatory design was employed using a cross-sectional survey of 412 halal entrepreneurs operating micro, small, and medium-sized enterprises across Indonesia. Data were collected through structured questionnaires and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results reveal that technology capability is the strongest determinant of digital business transformation, followed by innovation capability, digital literacy, digital ecosystem development, organizational readiness, government support, halal governance, transformational leadership, access to Islamic financing, and Islamic business ethics. The proposed model explains 74.1% of the variance in digital business transformation, indicating strong predictive capability. These findings highlight that successful digital transformation requires integrating technological resources, organizational capabilities, supportive policies, financial accessibility, and Islamic ethical values. This study contributes an integrated empirical model and practical recommendations to accelerate sustainable digital transformation within Indonesia's halal economy.

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