INTEGRATIVE MODEL OF GOVERNANCE, GREEN INNOVATION, AND ADAPTIVE CAPACITY AS THE KEY TO THE SUSTAINABILITY OF BUMDES IN RIAU
Abstract
This study examines the influence of governance on the sustainability performance of Village-Owned Enterprises (BUMDes), with green innovation as a mediating variable and adaptive capacity as a moderating variable. The research was conducted on BUMDes in Kampar and Pelalawan Regencies, Riau Province, Indonesia. A quantitative explanatory approach was employed using Structural Equation Modeling–Partial Least Squares (SEM–PLS) to test direct, mediating, and moderating relationships simultaneously. The sample consisted of 130 key BUMDes managers selected through purposive sampling. The results show that governance has a positive and significant effect on both sustainability performance and green innovation. Furthermore, green innovation significantly mediates the relationship between governance and sustainability performance. However, adaptive capacity does not significantly moderate the relationship between green innovation and sustainability performance. These findings highlight the importance of effective governance practices and environmentally oriented innovation in enhancing BUMDes sustainability, while also emphasizing the contextual role of adaptive capacity within community-based organizations. The study provides policy implications for strengthening participatory governance and building innovative capabilities to support inclusive and sustainable rural development.
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