Abstract
Financial management presents a persistent challenge for micro, small, and medium enterprises (MSMEs), particularly in developing regions where many business owners rely on intuition and informal practices. This study examines the mediating role of working capital financial culture management (WCFCM) in the relationship between financial literacy, entrepreneurial orientation, and financial competitiveness among MSME owners. Drawing from the resource-based view (RBV) and cultural finance perspectives, this research integrates behavioural, strategic, and cultural dimensions into the analysis of financial decision-making. The study adopts a quantitative approach using survey data collected from 230 MSME owners in Indonesia. The questionnaire was adapted from validated instruments and modified to reflect local financial practices. Data analysis was performed using Structural Equation Modelling–Partial Least Squares (SEM-PLS) and Hayes’ PROCESS to test both direct and mediated effects. The results indicate that financial literacy and entrepreneurial orientation positively influence financial competitiveness, and that working capital financial culture management significantly mediates these relationships. The findings highlight that financial management among MSME owners is not solely driven by rational calculations or instinctive decisions, but also deeply rooted in cultural values and local wisdom. Specifically, principles such as frugality, cooperation, and resource preservation influence how working capital is structured and utilized. These insights underscore the need to recognize culturally embedded behaviours in designing financial education and support programs. By acknowledging the behavioural and cultural foundations of financial decision-making, this study contributes to a more contextually grounded understanding of MSME competitiveness and offers implications for policy and practice in similar socio-economic environments.
Keywords: Competitiveness, Cultural Finance, Financial Management, Local Wisdom, MSMEs, Working Capital.