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Rural development from village funds, village-owned enterprises, and village original income

Authors :
Rian Hilmawan
Yesi Aprianti
Diem Thi Hong Vo
Rizky Yudaruddin
Ratih Fenty Anggraini Bintoro
Yuli Fitrianto
Noor Wahyuningsih
Source :
Journal of Open Innovation: Technology, Market and Complexity, Vol 9, Iss 4, Pp 100159- (2023)
Publication Year :
2023
Publisher :
Elsevier, 2023.

Abstract

This study investigates whether village funds, village-owned enterprises (henceforth, BUMDes), and village original income in Indonesia (PADes) enhance rural development. We employ three empirical methodologies to analyze data collected from 361 districts across Indonesia. These methods encompass cross-section regression, Difference-in-Difference (DID) technique, and Structural Equation Model (SEM)-based mediation analysis. The findings show that village funds positively and significantly impact rural development (measured using the village development index). However, the impact of BUMDes on rural development shows weak evidence. The quasi-experiment also reveals that districts with higher funding for their villages do not experience greater improvements in the village development index between 2016 and 2020. Furthermore, our study indicates that PADes play a crucial role in determining rural development, either directly or as a mediator for village funds and BUMDes. Policymakers should monitor the allocation of village funds to evaluate future allocation policies. Additionally, PADes performance is important for determining village fund transfers and development progress.

Details

Language :
English
ISSN :
21998531
Volume :
9
Issue :
4
Database :
Directory of Open Access Journals
Journal :
Journal of Open Innovation: Technology, Market and Complexity
Publication Type :
Academic Journal
Accession number :
edsdoj.2d35fe039497fa34a1306a07b190b
Document Type :
article
Full Text :
https://doi.org/10.1016/j.joitmc.2023.100159