Abstract: This study aims to analyze and explain the effect of government policies and social capital on entrepreneurship and SME performance, and anal yze the role of entrepreneurship as a mediator on the influence of government policies and social capital on the performance of wood craft SMEs in Tegallalang Village. This research was conducted in Tegallalang Village which is a center of wood crafts in Gianyar Regency. The population in this study was 84 wood craft SMEs in Tegallalang Village, where the sample was determined by saturated sample technique. Data collected through a questionnaire instrument that has been tested for validity and reliability are then analyzed using the SEM-PLS technique. The analysis shows that government policies and social capital directly have a positive and significant effect on entrepreneurship of SMEs. Government and entrepreneurial policies of SMEs directly and positively and significantly influence the performance of SMEs, but social capital does not significantly influence the performance of SMEs. Entrepreneurship significantly mediates the indirect effect of government policies and social capital on the performance of SMEs in Tegallalang Village, Gianyar Regency. The indirect effect of government policy on SME performance is partial mediation, while the indirect effect of social capital on SME performance is full mediation.
Keywords: Government Policy, Social Capital, Entrepreneurship, Performance, Small and Medium Enterprises (SMEs).
Title: The Effect of Government Policy and Social Capital on Entrepreneurship and Performance of Medium-scale Woodcraft Industry in Tegalalang Village, Gianyar Regency
Author: Nyoman Sugiarta, Gede Sudjana Budiasa
International Journal of Social Science and Humanities Research
ISSN 2348-3156 (Print), ISSN 2348-3164 (online)
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