The Effect of Government Policies on the Success of Micro, Small, and Medium Enterprises (MSMEs) in Regional Development in North Tapanuli Regency

Abstract

This research delves into the Micro, Small, and Medium Enterprises (MSMEs) sector in North Tapanuli Regency, North Sumatra, focusing on the impact of government policies on the success of MSMEs. The research, conducted from October 2023, utilizes interviews and documentation as data collection methods. From a total of 39,856 MSME units, a simple random sample of 100 respondents was selected using the slovin pattern. Key variables include Monetary Policy (X1), Fiscal Policy (X2), and MSME Success (Y1). Monetary Policy is related to People's Business Credit, while Fiscal Policy includes aspects of taxation and financing. MSME success is measured through growth, product value, funding access, information, business expansion, market penetration, and social, cultural, and economic impact. Data analysis employs Partial Least Square (PLS) to identify the impact of government policies. Results reflect a positive contribution of fiscal and monetary policies to MSME success. Model evaluation considers validity and reliability, while the contribution of MSMEs to the Regional Gross Domestic Product (GDP) is analyzed through Proportional Analysis. This research adopts a holistic approach, combining qualitative and quantitative elements to provide an in-depth understanding of the role of MSMEs in North Tapanuli Regency and its implications for the regional GDP. The findings aim to serve as a policy foundation for the local government in supporting the growth and sustainability of MSMEs.