This study aims to analyze the effect of digital literacy on the success of digital transformation in Micro, Small, and Medium Enterprises (MSMEs). The research employed a quantitative approach using a survey method targeting MSME owners who have adopted digital technologies in their business operations. Data were analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The results indicate that digital literacy has a positive and significant effect on the success of digital transformation, with a path coefficient of 0.782 and a significance value of 0.000. The R-square value of 0.612 demonstrates that digital literacy explains 61.2% of the variance in digital transformation success. These findings confirm that MSME owners’ ability to access, understand, evaluate, and effectively utilize digital technologies plays a strategic role in improving operational efficiency, market expansion, and business competitiveness. This study highlights the importance of strengthening digital literacy as a key priority in accelerating sustainable MSME digitalization policies.
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