Analytical Modeling and Numerical Simulation of Digital Capability Dynamics in MSMEs

Abstract

This study presents an analytical model and numerical simulation to examine the dynamic relationships among perceived usefulness, perceived ease of use, digital capability, and business performance in micro, small, and medium enterprises (MSMEs). Grounded in the Technology Acceptance Model (TAM), the framework transforms behavioural variables into analytical equations to describe their interdependent effects over time. Using data from 222 MSME actors in Makassar City, the model was validated through Partial Least Squares Structural Equation Modeling (PLS-SEM) and further simulated numerically to observe system stability and sensitivity. Results indicate that both perceived usefulness and ease of use positively affect performance, while digital capability exerts a partial mediating and selective moderating influence. The analytical and numerical findings extend TAM into a mathematical domain and provide a theoretical basis for designing optimized digital capability strategies to strengthen MSME competitiveness in developing economies.