Competitiveness and Performance Reconstruction of MSMEs in Religious Tourism Region in East Java

Abstract

Purpose: This study examined the effect of local wisdom value and management orientation on competitiveness and performance of MSMEs and the effect of competitiveness on MSMEs’ performance.

Design/methodology/approach: Path analysis was employed to analysis data. The population criteria of this research were active MSME actors in December 2017, who actively engaged in the business for 15 years. There were 63 business actors as the sample of this study. The path analysis showed that both local wisdom and management orientation variables had a direct, posotove and significant influence on the level of competitiveness and performance of the MSMEs. The competitiveness level had a direct and significant influence on the performance level of MSMEs.

Findings: The research found that (1) the better the local wisdom value was carried out on a structured and periodic basis for MSME business actors, the stronger the level of competitiveness and performance of the MSMEs, and (2) the better the management orientation level, the better the competitiveness and performance level of the MSMEs. Furthur the competitiveness level was considered as a fundamental key-issue. This study suggests that local wisdoms value shall be considered to enhance the performance for MSMEs business in tourism of East Java.

Paper type: Research paper