The Effect of Human Capital, Social Capital, and Financial Capital on Micro and Small Business (MSE) Survival: A Study in DKI Jakarta

Meliza Meliza () and Ruslan Prijadi
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Meliza Meliza: Universitas Indonesia, Master of Management, Faculty of Economics and Business
Ruslan Prijadi: Universitas Indonesia, Master of Management, Faculty of Economics and Business

A chapter in Proceedings of the 7th Global Conference on Business, Management, and Entrepreneurship (GCBME 2022), 2024, pp 1682-1696 from Springer

Abstract: Abstract The most important pillar of the Indonesian economy is SMEs. According to data, there were 64.2 million SMEs in 2018 and they contributed 61.07% of the GDP, or 8,573.89 trillion rupiahs to the economy. The emergence of the COVID-19 pandemic in 2019 resulted in severe economic losses across the country due to restrictions on communal activities. Actors in microbusiness make up the majority of MSMEs, accounting for 98.68% of all businesses with a workforce of about 89%. In 2019, there were 64.6 million microenterprise, 798.9 thousand units are small businesses, and 65 thousand units are medium enterprises. Small businesses have been particularly hard hit by the COVID-19 crisis. Many are temporarily closing their businesses due to cash flow issues. The contribution to GDP in 2020 decreased by 23% on an annual basis, from 60.3% to 37.3%. The COVID-19 pandemic had a major impact on the business survival of micro and small businesses. This study analyses the impact of financial, social, and human capital on the survival of micro and small businesses in DKI Jakarta during COVID-19 by examining access to finance, trust in networks, human capital, internal social capital, and external social capital as predictors. An online structured questionnaire was conducted to gather data from 150 micro and small business owners in DKI Jakarta. The data were analyzed using SPSS software for correlation analysis and regression. The results revealed that access to finance, trust in networks, internal social capital, and external social capital affected MSEs’ survival, while human capital did not affect MSEs’ survivability. This study is considered useful for micro and small enterprises in DKI Jakarta to develop their businesses by focusing on the main factors that affect the survival of MSEs. MSEs seeking to be resilient in the face of any disturbance that may cause disruption in their business may find these insights advantageous.

Keywords: Financial Capital; Human Capital; Micro and Small Business; SME Survivability; Social Capital (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-234-7_177

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