Analyzing key success factors of local economic development in several remote areas in Indonesia

Abstract

Purpose The purpose of this paper is to analyze the potential of remote areas in Indonesia and find out the important variables that influence key success factors of Local Economic Regional Development (LERD) program in several areas. Design/methodology/approach A series of structured interviews were conducted with the chairman and staff of local government, academician, private sectors and locals who are induced to work together to improve quality of life, create new opportunities and fight poverty in Bau-Bau, Singkawang and Kupang. Subsequently, the results from the structured interviews were analyzed using qualitative analysis to arrive at the model of LERD in Indonesia. Findings The findings show that variables that influence the key success factors of LERD in this research are resources endowment, social capital and local support as independent variables; entrepreneurial strategy as moderating variable; and perceived performance as dependent variable. Research limitations/implications This study was conducted only in Indonesia which focused on local economic regional development in Indonesia. Despite this limitation, the findings of this study enable the construction of a general model that highlights LERD in chosen areas. The model is also expected to give an idea of how to develop economic region. Originality/value The paper adds to the literature on LERD by enabling researchers and practitioners to understand the model of LERD in Indonesia.