Journal of Regional Economics Indonesia
Vol. 7 No. 1 (2026): February 2026

Policy-Driven Capability Building and MSME Competitiveness: Evidence from a Local Government Business Support Program in Indonesia

Sahputra, Adhitya Maulana (Unknown)
Hartanto, Arif Dwi (Unknown)



Article Info

Publish Date
27 Feb 2026

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.

Copyrights © 2026






Journal Info

Abbrev

jrei

Publisher

Subject

Economics, Econometrics & Finance

Description

The Journal of Regional Economics Indonesia welcomes studies on the themes of development economics, especially those concerning four main issues, namely: (i) regional finance; (ii) banking; (iii) human resources; and (iv) regional / spatial economics. These four issues are obtained through ...