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All Journal Journal of Regional Economics Indonesia
Sahputra, Adhitya Maulana
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Economics, Econometrics & Finance

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Policy-Driven Capability Building and MSME Competitiveness: Evidence from a Local Government Business Support Program in Indonesia Sahputra, Adhitya Maulana; Hartanto, Arif Dwi
Journal of Regional Economics Indonesia Vol. 7 No. 1 (2026): February 2026
Publisher : University Merdeka Malang

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.26905/jrei.v7i1.16918

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play a critical role in local economic development, yet many face structural constraints related to managerial capacity, innovation, and market access. This study examines the effectiveness of the Business Clinic Program initiated by the Malang City Government in strengthening MSME competitiveness. Using a mixed-methods approach, data were collected from 60 MSME participants across five districts in Malang, Indonesia. Quantitative analysis was conducted using multiple linear regression, complemented by qualitative insights from interviews and program documentation. The findings indicate that the program significantly contributes to improving MSME competitiveness, particularly through enhanced entrepreneurial management and production innovation. However, limited program coverage, low digital literacy, and restricted access to formal financing remain key challenges. This study proposes an integrated intervention framework linking input resources, capability development, and market expansion as a policy model to support MSME competitiveness. The findings highlight the importance of sustained institutional support and targeted capacity-building initiatives in local economic development.
Co-Authors Hartanto, Arif Dwi