Mulkan Ritonga, Ade Parlaungan Nasution, Rahma Muti’ah

Determinants of MSME Sustainability: A Regression-Based Study in Labuhanbatu

Introduction

Determinants of msme sustainability: a regression-based study in labuhanbatu. Explore factors for MSME sustainability in Labuhanbatu. Regression analysis reveals education, government support, and capital access are crucial for healthy, independent MSMEs.

Abstract

This study aims to identify factors that influence the development of healthy and independent MSMEs in Labuhanbatu Regency, Indonesia. The research method uses a quantitative approach with primary data collection through interviews and questionnaires distributed to 342 MSME actors in Labuhanbatu Regency. The sample was taken using a stratified random sampling technique based on the 2019 MSME population. The data were analyzed using multiple regression techniques to test the effect of the independent variables partially and simultaneously on the dependent variable. The results showed that education and skills (β = 25.299, p < 0.01), locus of control (β = 4.452, p < 0.01), government support and policies (β = 18.001, p < 0.01), and access to capital and financial resources (β = 9.332, p < 0.01) have a positive and significant influence on the development of healthy and independent MSMEs. In contrast, financial literacy (β = 1.025, p > 0.1), partnership networks (β = 1.005, p > 0.1), and infrastructure and technology (β = 1.087, p > 0.1) did not contribute significantly in this study. These findings emphasize the need for human resource capacity building and government policies that support access to capital as key strategies to encourage the sustainability and self-reliance of MSMEs in the region.

Review

This study provides a valuable quantitative analysis of factors influencing MSME sustainability in Labuhanbatu Regency, Indonesia, addressing a highly relevant topic given the critical role of MSMEs in economic development. The research employs a sound methodological approach, collecting primary data from a substantial sample of 342 MSME actors using stratified random sampling, which enhances the representativeness of the findings. The application of multiple regression effectively identifies several key determinants, including education and skills, locus of control, government support and policies, and access to capital and financial resources, all of which exhibit a positive and significant influence on MSME development. These empirically-backed results offer clear directions for strategic interventions. However, the study presents some findings that warrant further exploration and clarification. The non-significant contribution of financial literacy, partnership networks, and infrastructure and technology to MSME development is particularly noteworthy, as these factors are commonly recognized as crucial for business growth and sustainability. The reported beta values for these non-significant variables are considerably lower than those for the significant variables, suggesting a minimal observed effect in this specific context. It would be beneficial for the full paper to elaborate on the precise measurement of all variables and clarify whether the reported beta coefficients are standardized, which would facilitate a more nuanced interpretation of the findings. Additionally, a clearer articulation of how "the development of healthy and independent MSMEs" was operationalized and measured as the dependent variable would enhance the study's transparency. Despite these points, the research offers significant practical implications for policymakers and development organizations. The emphasis on strengthening human resource capabilities through education and skills, fostering an internal locus of control among entrepreneurs, and ensuring robust government support alongside facilitated access to capital are actionable recommendations tailored to the identified needs. For future research, it would be highly insightful to investigate the underlying reasons for the non-significance of factors like financial literacy and partnership networks within this regional context, perhaps through qualitative follow-up studies or by exploring potential moderating variables. Overall, this study makes a solid contribution to understanding regional MSME dynamics and provides a strong foundation for targeted development initiatives in Labuhanbatu.

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