Economic Vulnerability of Small Producers Due to Income Uncertainty and Institutional Asymmetry

Fatmawati Sungkawaningrum (INISNU Temanggung)
Navirta Ayu (STAI Yogyakarta)
Mohamad Abdul Munjid (INISNU Temanggung)

Journal of Economics, Entrepreneurship, Management Business and Accounting
Vol 4 No 4 (2026): Volume 4, Issue 4, July 2026

Purpose – This study examines the economic vulnerability of small-scale producers in Indonesia by analyzing the effects of income uncertainty and institutional asymmetry, while incorporating regulatory certainty as a mediating variable and the internalization of moral values as a moderating variable. The study aims to explain how structural, regulatory, and ethical dimensions influence the sustainability and resilience of small-scale producers. Design/methodology/approach – This study employed a quantitative approach using a survey design involving small-scale producers in Indonesia. Data were collected through structured questionnaires and analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM) to examine the direct, mediating, and moderating relationships among income uncertainty, institutional asymmetry, regulatory certainty, moral value internalization, and economic vulnerability. Finding/Results – The findings reveal that institutional asymmetry has a strong positive and significant effect on economic vulnerability, indicating that structural market inequality is the primary determinant of vulnerability among small-scale producers. In contrast, income uncertainty does not have a significant direct effect on economic vulnerability, as reflected by the near-zero path coefficient. However, its influence operates indirectly through regulatory certainty as a mediating mechanism. Furthermore, the internalization of moral values moderates the relationship between institutional asymmetry and economic vulnerability by strengthening producers’ adaptive capacity and resilience toward structural market pressures. Originality/Value – This study contributes to the literature by integrating regulatory certainty and moral value internalization into a comprehensive structural model of economic vulnerability among small-scale producers. The findings emphasize the importance of inclusive market institutions, regulatory certainty, and ethical-economic values in reducing inequality and strengthening long-term economic sustainability.