Determinants of Micro, Small and Medium Enterprise (MSMEs) Performance: Evidence from Aceh Province, Indonesia
https://doi.org/10.56225/ijfeb.v4i1.419
Keywords:
Business Capital, Product Quality, Human Resource Competence, MSMEs Performance, Aceh contextAbstract
This study analyzes the effect of business capital, product quality, and human resource (HR) competence on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Aceh Province, Indonesia. MSMEs play a strategic role in regional economic development but face persistent challenges, including limited capital, suboptimal product quality, and varying levels of HR competence. A quantitative approach was employed, utilizing a survey method where questionnaires were distributed to 357 culinary sector MSMEs across 23 districts/cities in Aceh. The collected data were analyzed using multiple linear regression with SPSS-20. The results indicate that business capital and product quality have a significant positive effect on MSME performance, while HR competence was found to have an insignificant effect. However, collectively, all three variables significantly affect MSME performance. These findings underscore the critical importance of facilitating access to capital and driving improvements in product quality to enhance MSME performance. Meanwhile, the negligible influence of HR competence suggests a need for further investigation into other factors, such as work experience or the quality of technical training. This study provides practical implications for MSME actors and policymakers, recommending a focused strategy on strengthening financial access and product innovation, alongside developing more targeted HR development programs to improve the competitiveness of MSMEs in Aceh Province, Indonesia.
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