This study aims to examine whether applying governance principles (accountability and transparency) can directly drive the performance of village-owned enterprises (VOEs) and indirectly through social innovation.
This study surveyed 250 VOEs in Central Java, Indonesia. The analysis tool uses SmartPLS.
This study concludes that accountability, transparency and social innovation significantly affect VOE performance. Accountability and transparency are proven to support social innovation, which in turn improves VOE performance.
This study only covers VOEs in Central Java and relies on survey data, which may limit respondents’ representation and understanding of the research variables.
The findings emphasize the need for VOE managers to focus on implementing accountability and transparency in VOE management to drive better performance through social innovation.
This research was conducted in the VOE environment, where village community-based social enterprises are the main pillars of village communities’ economic and social development. This research explicitly defines performance as how a VOE can achieve the objectives of its establishment according to Indonesian Government Regulation No.11 of 2021, so that it can be a reference in further research on VOE performance. This research combines Stewardship and institutional theories to explain the critical role of accountability and transparency in driving social innovation and the performance of VOEs. This research provides new insights into how accountability and transparency influence VOE performance through social innovation, which has not previously been studied.
