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http://dx.doi.org/10.13106/jafeb.2021.vol8.no12.0305

The Effects of Product Innovation, Process Innovation and Government Policy on SMEs Performance: Evidence from Indonesia  

ISMANU, Sidik (Department of Accounting, State Polytechnic of Malang)
KUSMINTARTI, Anik (Department of Accounting, State Polytechnic of Malang)
RIWAJANTI, Nur Indah (Department of Accounting, State Polytechnic of Malang)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.12, 2021 , pp. 305-311 More about this Journal
Abstract
The purpose of this study is to examine and analyze product innovation and process innovation as an indicator of innovation that affects the performance of small and medium enterprises (SMEs). Government policy as a moderator of the effect of innovation on performance. This research was conducted during the COVID-19 pandemic. The population in this study are SMEs that produce clothes and t-shirts in Indonesia. Data collection is done through questionnaires and direct interviews. Online questionnaires were given to the managers and business owners. The sampling technique used is purposive sampling based on certain conditions of the research object, and in this study 100 business units were selected. The result of loading factor correlation between indicator and latent construct is significant. Hypothesis which explored the linear relationship between the construct variables was tested. Structural Equation Modeling (SEM) was used. The results of this study indicate that there is a positive relationship between innovation and business performance, and government policies have an important role as a full moderator in this relationship. The study findings concluded that the government policies are an important instrument in supporting the development of SMEs by innovating product and process innovation.
Keywords
Product Innovation; Process Innovation; Government Policy; Business Performance; SMEs;
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