<![CDATA[The advancement of digital transformation has profoundly altered conventional business operations, including those conducted by Micro, Small, and Medium Enterprises (MSMEs). This research seeks to investigate the impact of digitalization, with a specific focus on internet usage, electronic money (e-money), and electronic commerce (e-commerce), on Indonesia’s Gross Domestic Product (GDP) and the circulating money supply (M2). The study utilizes a simultaneous equation modeling approach, employing the Two-Stage Least Squares (TSLS) estimation technique to analyze the interrelationships among variables. The empirical findings reveal that internet usage, the capital owned by MSMEs, and the volume of money in circulation exert a significant influence on the nation’s economic growth. Conversely, only internet usage is found to have a statistically significant effect on the money supply. These outcomes underscore the pivotal function of MSMEs within the digital economic ecosystem and emphasize the necessity for well-organized digitalization strategies. Consequently, the research advocates for robust governmental intervention and support to accelerate the digital transformation of MSMEs, aiming to maximize their role in driving Indonesia’s overall economic progress.]]>
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