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

Israr Ahmad

doi:10.36923/economa.v27i1.116

Open Access Article Financial Management

Israr Ahmad ⁽¹⁾

(1) Universiti Sains Malaysia, Malaysia

https://doi.org/10.36923/economa.v27i1.116

Issue
Vol. 27 No. 1 (2024)

Submitted
March 8, 2023

Published
February 10, 2024

Keywords:

Strategic Financial Management, Digital Economy, Corporate Value, Digital Transformation, Innovation Culture, Financial Performance

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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.

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Authors

Israr Ahmad

Universiti Sains Malaysia

https://orcid.org/0000-0001-5521-0732

Author Biography

Israr Ahmad, Universiti Sains Malaysia

Dr. Israr Ahmad is a dedicated academic and management professional, currently engaged as a Post-Doctoral Fellow at Universiti Sains Malaysia's School of Management. With a doctorate from Universiti Utara Malaysia, he has 6 years of combined experience in industry and academia. Dr. Ahmad has made significant contributions to the field with 20 research publications in renowned national and international journals, and actively participates in editorial capacities. His research interests innovation management, strategic management, and organizational development. Committed to using his expertise in education, research, and analytics, Dr. Ahmad aspires to elevate underprivileged communities through advanced management education, advocating for higher enrollment and curriculum modernization in higher education. His post-doctoral work continues to build on his vision of merging research with practical applications to benefit society sustainably.

Ahmad, I. (2024). The Role of Strategic Financial Management in Enhancing Corporate Value and Competitiveness in the Digital Economy. Innovation Economics Frontiers, 27(1), 1–07. https://doi.org/10.36923/economa.v27i1.116

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