Open access Articles CC BY 4.0 October 2, 2024

Open Access Article Financial Management

The Role of Strategic Financial Management in Enhancing Corporate Value and Competitiveness in the Digital Economy

Authors

Authors: Israr Ahmad1,*

Author info & affiliations
  1. School of Management, Universiti Sains Malaysia, 11800 Minden, Penang, Malaysia
  2. * Author to whom correspondence should be addressed.

Publication: Innovation Economics Frontiers, Vol. 27 No. 1 (2024), pp. 1-08 https://doi.org/10.36923/economa.v27i1.116

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Abstract

This study examines how strategic financial management boosts SMEs' corporate value and competitiveness in the fast-changing digital economy. As digital technologies change market landscapes, SMEs face unique challenges and opportunities in aligning their financial strategies with digital transformation. This mixed-methods study combines quantitative regression analysis with qualitative interviews with senior management from technology, finance, retail, and manufacturing. Quantitative findings from 129 SMEs show a positive correlation between strategic alignment, innovation culture, and corporate value and financial performance, highlighting the complex but crucial role of digital technology investments and risk management. Qualitative insights emphasise the need to align these investments with strategic goals and foster innovation. This study contributes twice. First, it empirically shows how strategic financial management practises help navigate the digital economy, enriching strategic management and finance literature. Second, it advises SMEs to take a holistic approach to strategic financial management that prioritises digital technology investments and ensures they are strategically aligned, culturally ingrained, and risk-averse. This research shows how financial strategy and digital innovation interact to drive SME competitiveness and value creation in the digital age.

Article information

Keywords
Strategic Financial ManagementDigital EconomyCorporate ValueDigital TransformationInnovation CultureFinancial Performance
Section
Articles
Issue
Vol. 27 No. 1 (2024)
Pages
1-08
Submitted
August 3, 2023
Published
October 2, 2024
Corresponding author
Israr Ahmad
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