Determinant factors of BUM Desa (village-owned enterprises)
performance in Indonesia: a partial least squares structural
equation models approach

J 2025

Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach

INDRAWANTO, Chandra; Maesti MARDIHARINI; Michal PLAČEK; Irwanda WISNU WARDHANA; Taufik RAHARJO et al.

Basic information

Original name

Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach

Authors

Edition

Cogent Business & Management, 2025, 2331-1975

Other information

Language

English

Type of outcome

Article in a journal

Field of Study

50204 Business and management

Country of publisher

United Kingdom of Great Britain and Northern Ireland

Confidentiality degree

is not subject to a state or trade secret

References:

URL

Impact factor

Impact factor: 2.900 in 2024

Marked to be transferred to RIV

Yes

Organization unit

Ambis University

DOI

https://doi.org/10.1080/23311975.2025.2580028

UT WoS

001606897000001

Keywords in English

BUM Desa performance;determinant factors;Indonesia entrepreneurship;PLS-SEM;village-owned enterprises

Abstract

In the original language

A significant challenge to sustainable growth in Indonesia is the disparity between urban and rural development. While urban areas continue to expand, rural regions require specific interventions to progress. To harness this potential, the Indonesian government has implemented strategic measures by establishing Village-Owned Enterprises (BUM Desa). This study identifies key factors influencing BUM Desa performance across two districts, Klaten Regency in Central Java Province and Penajam Paser Utara Regency in East Kalimantan Province, with contrasting socio-economic conditions and infrastructural availability. Variables, factors, and indicators that are suspected of influencing BUM Desa performance were created through literature searches and expert opinions through FGDs conducted in both districts. PLS-SEM analysis result shows that BUM Desa in both districts is influenced by the same three variables, namely human resources, BUM Desa governance, and capital. The capital variable has the most influence on BUM Desa performance in Klaten Regency, while in Penajam Paser Utara Regency, the BUM Desa governance variable has the most influence. The findings underscore the imperative for village authorities to exhibit a strong institutional commitment to BUM Desa development through the strategic appointment of competent managerial personnel, the provision of adequate financial resources, and the facilitation of its formal legal establishment.

Cite

INDRAWANTO, Chandra; Maesti MARDIHARINI; Michal PLAČEK; Irwanda WISNU WARDHANA; Taufik RAHARJO; Aditya WIRAWAN; Roby SYAIFUL UBED; Handewi PURWATI SALIEM; Bedy SUDJARMOKO; Ermiati ERMIATI; Budi WARDONO; Agus WAHYUDI and Ketut I ARDANA. Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach. Cogent Business & Management. 2025, vol. 12, No 1, p. 1-20. ISSN 2331-1975. Available from: https://doi.org/10.1080/23311975.2025.2580028.

@article{499729,
   author = {Indrawanto, Chandra and Mardiharini, Maesti and Plaček, Michal and Wisnu Wardhana, Irwanda and Raharjo, Taufik and Wirawan, Aditya and Syaiful Ubed, Roby and Purwati Saliem, Handewi and Sudjarmoko, Bedy and Ermiati, Ermiati and Wardono, Budi and Wahyudi, Agus and Ardana, Ketut I},
   article_number = {1},
   doi = {https://doi.org/10.1080/23311975.2025.2580028},
   keywords = {BUM Desa performance;determinant factors;Indonesia entrepreneurship;PLS-SEM;village-owned enterprises},
   language = {eng},
   issn = {2331-1975},
   journal = {Cogent Business & Management},
   title = {Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach},
   url = {https://www.tandfonline.com/doi/full/10.1080/23311975.2025.2580028#abstract},
   volume = {12},
   year = {2025}
}

TY  - JOUR
ID  - 499729
AU  - Indrawanto, Chandra - Mardiharini, Maesti - Plaček, Michal - Wisnu Wardhana, Irwanda - Raharjo, Taufik - Wirawan, Aditya - Syaiful Ubed, Roby - Purwati Saliem, Handewi - Sudjarmoko, Bedy - Ermiati, Ermiati - Wardono, Budi - Wahyudi, Agus - Ardana, Ketut I
PY  - 2025
TI  - Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach
JF  - Cogent Business & Management
VL  - 12
IS  - 1
SP  - 1-20
EP  - 1-20
SN  - 23311975
KW  - BUM Desa performance;determinant factors;Indonesia entrepreneurship;PLS-SEM;village-owned enterprises
UR  - https://www.tandfonline.com/doi/full/10.1080/23311975.2025.2580028#abstract
N2  - A significant challenge to sustainable growth in Indonesia is the disparity between urban and rural development. While urban areas continue to expand, rural regions require specific interventions to progress. To harness this potential, the Indonesian government has implemented strategic measures by establishing Village-Owned Enterprises (BUM Desa). This study identifies key factors influencing BUM Desa performance across two districts, Klaten Regency in Central Java Province and Penajam Paser Utara Regency in East Kalimantan Province, with contrasting socio-economic conditions and infrastructural availability. Variables, factors, and indicators that are suspected of influencing BUM Desa performance were created through literature searches and expert opinions through FGDs conducted in both districts. PLS-SEM analysis result shows that BUM Desa in both districts is influenced by the same three variables, namely human resources, BUM Desa governance, and capital. The capital variable has the most influence on BUM Desa performance in Klaten Regency, while in Penajam Paser Utara Regency, the BUM Desa governance variable has the most influence. The findings underscore the imperative for village authorities to exhibit a strong institutional commitment to BUM Desa development through the strategic appointment of competent managerial personnel, the provision of adequate financial resources, and the facilitation of its formal legal establishment.
ER  -

INDRAWANTO, Chandra; Maesti MARDIHARINI; Michal PLAČEK; Irwanda WISNU WARDHANA; Taufik RAHARJO; Aditya WIRAWAN; Roby SYAIFUL UBED; Handewi PURWATI SALIEM; Bedy SUDJARMOKO; Ermiati ERMIATI; Budi WARDONO; Agus WAHYUDI and Ketut I ARDANA. Determinant factors of BUM Desa (village-owned enterprises) performance in Indonesia: a partial least squares structural equation models approach. \textit{Cogent Business \&{} Management}. 2025, vol.~12, No~1, p.~1-20. ISSN~2331-1975. Available from: https://doi.org/10.1080/23311975.2025.2580028.

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