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Financial Risk Management and Heritage Enterprise Sustainability: Exploring a Moderated Mediation Model Based on Cultural Identity and Financial Literacy in the Case of Pekalongan Regency, Indonesia

Author

Listed:
  • Aloysius Harry Mukti

    (Department of Accounting, Faculty Economic and Business, Universitas Bhayangkara Jakarta Raya, Bekasi 17143, Indonesia)

  • Oswald Timothy Edward

    (Faculty of Business and Management, Universiti Teknologi MARA, Segamat Campus, Segamat 85000, Malaysia)

  • Istianingsih Sastrodiharjo

    (Department of Accounting, Faculty Economic and Business, Universitas Bhayangkara Jakarta Raya, Bekasi 17143, Indonesia)

  • Andri Nur Cahyo

    (Department of Batik Craft, Institut Teknologi dan Sains Nahdlatul Ulama Pekalongan, Pekalongan 51173, Indonesia)

  • Irwan Cahyadi

    (Department of Management, Faculty Economic and Business, Universitas Bumigora, Kota Mataram 83127, Indonesia)

  • Abdurrahman

    (Department of Management, Faculty of Economic and Business, University of Mataram, Kota Mataram 83115, Indonesia)

Abstract

Heritage-based enterprises, such as traditional batik businesses in Indonesia, face increasing financial challenges that threaten their long-term sustainability. This study investigates the role of financial risk management in supporting the sustainability of these enterprises, particularly among sole-proprietor batik artisans in Pekalongan, a city designated as a UNESCO Creative City for its cultural heritage. Using the Resource-Based View (RBV) as the theoretical lens, the research explores how internal capabilities like financial literacy and contextual factors such as cultural identity contribute to enterprise resilience. A cross-sectional survey was conducted among 110 artisans, and data were analyzed using structural equation modeling. The findings reveal that financial risk management directly enhances sustainability, while financial literacy serves as a partial mediator, and cultural identity acts as a significant moderator. These interactions suggest that sustainability in heritage sectors is not only a matter of financial competence but also of cultural embeddedness. The study highlights the importance of aligning financial strategies with cultural values to foster adaptive behavior and intergenerational continuity. The results offer practical implications for policymakers and development programs seeking to strengthen traditional enterprises through integrated financial and cultural capacity-building approaches.

Suggested Citation

  • Aloysius Harry Mukti & Oswald Timothy Edward & Istianingsih Sastrodiharjo & Andri Nur Cahyo & Irwan Cahyadi & Abdurrahman, 2026. "Financial Risk Management and Heritage Enterprise Sustainability: Exploring a Moderated Mediation Model Based on Cultural Identity and Financial Literacy in the Case of Pekalongan Regency, Indonesia," JRFM, MDPI, vol. 19(3), pages 1-21, March.
  • Handle: RePEc:gam:jjrfmx:v:19:y:2026:i:3:p:183-:d:1877640
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