Sustaining the development of MSEs in Indonesia: The moderating effects of the environment

Indah Pertiwi, Ruslan Prijadi

Research output: Contribution to journalConference articlepeer-review

Abstract

MSEs contribute much to the Indonesian economy and play a crucial role in achieving Sustainable Development Goals (SDGs) Unfortunately, MSEs still have limited access to finance. Financing access (SDGs' issue), support from the government (environmental aspect), and entrepreneurial traits (inside the MSEs) are central for MSEs' sustainability. This research investigates the role of a business environment built by the government to ease financial constraints and support self-efficacy in MSEs' sustainable growth. This research applies the Structural Equation Model method to 750 respondents. Initially the direct factors are estimated and then a moderating factor is added. The results find that financial constraints MSEs' experience limits the their sustainability, whereas self-efficacy enhances it. Although MSEs possess strong entrepreneurial characteristics as the basis for their growth, financing access remains a burden. The research confirms that the business environment created by the government is an effective strategy to facilitate MSEs' sustainability. However, MSEs' sustainability cannot be improved merely by government schemes but must be supported by the financial and banking sectors.

Original languageEnglish
Article number04006
JournalE3S Web of Conferences
Volume74
DOIs
Publication statusPublished - 12 Dec 2018
Event2018 International Conference Series on Life Cycle Assessment: Life Cycle Assessment as A Metric to Achieve Sustainable Development Goals, ICSoLCA 2018 - Jakarta, Indonesia
Duration: 24 Oct 201825 Oct 2018

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