This study aims to analyze the effect of managerial competence on the performance of MSMEs fostered by the Business Incubator in Palu City, with digital transformation as a mediating variable. The research employed a quantitative approach with an explanatory design involving 45 MSMEs selected through purposive sampling. Data were collected using questionnaires and analyzed with SEM-PLS through WarpPLS 7.0. The results indicate that managerial competence has a significant positive effect on MSME performance, while digital transformation has a significant negative effect and does not mediate the relationship. These findings highlight the importance of enhancing managerial competence to strengthen MSME performance in the digital era.
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