The quality of MSMEs is very much determined by competitive advantage by utilizing resources that focus on the development or acquisition of valuable resources and capabilities. The MSMEs sector with intangible assets of MSMEs role consisting of behavioral finance can influence financial decisions and improve financial performance. This study applied a quantitative research design, which was based on the positivism paradigm. This research was conducted first by using an in-depth interview since conducting the initial survey and distributing questionnaires to the respondents and then calculating three financial ratios to assess the quality of financial decisions. The next phase was the study on the ability to create value added through the calculation of Economic Value Added (EVA) as an indicator of MSME financial performance. The results showed that 1) Financial decisions had a positive and significant effect on financial performance; 2) Behavioral finance had a negative and significant effect on corporate financial decisions; 3) The indirect effect of behavioral finance on financial performance through corporate financial decision mediation was stated positive and not significant. Future studies can provide other proxies in measuring the performance of the Balance Scorecard, and can supply other contingencies, such as personality and defense mechanism attitudes.
Volume 12 | 08-Special Issue
Pages: 187-196
DOI: 10.5373/JARDCS/V12SP8/20202514