An Empirical Study of the Mediating Effect of the Adoption Level of IR4.0 technologies with MSMEs' Performance in Brunei Darussalam

This paper extends previous studies on how Micro Small Medium Enterprises (MSMEs) in Brunei Darussalam are adopting Industry 4.0 (IR4.0) technologies. In this study, we examined how two categories of IR4.0 adoption which are the Modest category and the Moderate category as mediating effects and how they can influence firm performance. A questionnaire-based survey was conducted to collect data from 201 owners or managers from MSMEs. The mediating effect is examined using Smart Partial Least Square- Structural Equation Modelling (Smart PLS-SEM) to test the hypotheses. The results indicate the Modest category has no mediation effect on the firm performance while the Moderate category has a mediating effect between business financial planning and firm performance, and cost and firm performance. It also shows that between the Modest and Moderate categories, the Modest category seems to be reluctant in expanding its potential in the use of technologies due to some reasons for example knowledge, skills or financial resources. However, this research is only limited to MSMEs, it is suggested to conduct a comparison study between MSMEs and large businesses in Brunei Darussalam or an international-based study. The study between Micro, Small Enterprises (MSEs) and Medium Enterprises (MEs) will help to widen the insight into this area of study. These findings can benefit the business owners, technology experts and policymakers responsible for assisting MSMEs in adopting IR4.0 technologies.