Multiplier Effect of the Role of Government Policy with Implementation of Corporate Social Responsibility in Order to Improve Performance and Competitiveness of UMKM in the Province of Bali
Abstract
The Indonesian economy currently relies on Micro-, Small-, and Medium Enterprises (MSMEs). The important role of MSMEs is shown by their large numbers and moving in various business sectors and touching the interests of the community, being the business sector with the greatest contribution to national development, and creating considerable employment opportunities for domestic workers. The seriousness of the government’s role in improving the performance and competitiveness of MSMEs is needed, including making innovative efforts to take advantage of various opportunities including the assistance of the private sector. The implementation of Corporate Social Responsibility (CSR) can be seen as an alternative form of government intervention in terms of policy, so that the synergy of the private sector in implementing CSR with the MSMEs is expected to stimulate improvement in the performance and competitiveness of MSMEs. This study aims to prove the multiplier effect of the role of government policy with the implementation of CSR in order to improve the performance and competitiveness of MSMEs. The research sample was determined by the proportionate cluster random sampling of 67 MSMEs spread across Bali. Data analysis was carried out quantitatively using Partial Least Square Path Modeling. The results of the study prove that the role of government policy with the implementation of CSR concurrently influences the 5 performance variables and 6 variables of competitiveness of MSMEs. This proves that the role of government policy with the implementation of CSR has been proven to provide a multiplier effect on improving the performance and competitiveness of MSMEs.
Keywords: multiplier effect, role of government, implementation of CSR, performance, competitiveness, MSMEs
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