Micro, Small, and Medium Enterprises (MSMEs) play a significant role in economic development and international trade in Southeast Asia. With increasing global competition, the adoption of digital technologies and sustainable business models has become essential for MSMEs aiming to expand across borders and sustain long-term growth. This study investigates how digital marketing and entrepreneurial capabilities affect sustainable cross-border expansion of MSMEs in Indonesia and Malaysia, with energy efficiency as a mediating factor, using Partial Least Squares Structural Equation Modeling (PLS-SEM) analysis. A quantitative, cross-sectional research design was employed, and data were collected through a structured questionnaire from 120 MSME owners and managers involved in digital business and cross-border trade. The collected data were analyzed using descriptive statistics, reliability and correlation analysis, and Structural Equation Modeling (SEM). The results indicate that digital marketing capabilities significantly enhance sustainable cross-border growth, while entrepreneurial capabilities positively influence business growth and strategic flexibility. These findings support the need for MSMEs to transform their retail and consumer marketing strategies, as digital tools foster better engagement and global market reach. Furthermore, energy efficiency practices were found to have a positive effect on sustainable MSME performance and partially mediate the relationship between digital strategies and cross-border expansion. These findings highlight the importance of integrating digital marketing strategies, entrepreneurial competencies, and sustainable practices to strengthen MSME competitiveness. The study suggests that policymakers and business support organizations should promote digital transformation and sustainable entrepreneurship to facilitate MSME growth in an increasingly dynamic and competitive global market.
Sibghatullah et al. (2026) studied this question.