Jurnal Ekonomi, Bisnis & Entrepreneurship (e-Journal)

The Influence of Transformational Leadership and Intrinsic Motivation on Employee Performance with Discipline as An Intervening Variable

Asih Kurnianingsih, Lona Noviani, Rohaelis Nuraisiah, Jeffry Adriansyah — Thu, 05 Sep 2024 00:00:00 +0700

This study is aimed to analyze the influence Transformational Leadership, intrinsic motivation on Job performance of employee, with work discipline as intervening variable. Case study at PT. Indonesia Pos Chemtech Chosun Ref. The population that used in this research is 45 (forty five) employees, from production department and Logistic department.
This study used regression analysis to see the contribution from each independent variable Job Performance. Data analysis with multiple regressions and support by SPSS software (Statistical Package for Social Science) version 21.0. The result indicate that Transformational Leadership and Intrinsic Motivation has significant influence to job performance through work discipline as intervening mediator. The suggested variables are: transactional leadership, extrinsic motivation, job satisfaction and work environment. Because with more good performance of employees will also have a good effect on the company

Employee Engagement on Behavioral Performance: Study on public organization in Bandung, Indonesia.

Iwan Sidharta — Thu, 05 Sep 2024 00:00:00 +0700

The demand for adapting new skills is an essential factor for employees to continue to be able to compete competitively. This research aims to determine employee commitment to Behavioral Performance. Researchers conducted a survey of government agency employees to test the influence of employee commitment on Behavioral Performance, conducting first-order and second-order tests. The research respondents were 87 employees at three government agencies in Bandung. The research results indicate that employees firmly commit to improving Behavioral Performance. The research implications suggest that government agencies should provide opportunities for employees to increase their commitment by adopting new skills, strengthening employee commitment through relevant direction strategies, providing constructive feedback, and emphasizing the consequences if duties and obligations are not fulfilled to provide optimal performance.

The Influence of Investment and Labor on Economic Growth in South Sumatra Province

Esti Hajiah, Elvira Rosiana, Indri Priscilia, Maya Panorama — Thu, 05 Sep 2024 00:00:00 +0700

This research aims to examine the influence of investment and labor on economic growth in South Sumatra Province. The method used in this research uses quantitative methods from cross section data from 17 districts in South Sumatra Province and time series data for 5 years from 2018-2022. Quantitative analysis is processed through the eviews program. Based on the results of the analysis, it was concluded that investment had a partial effect on the economy in South Sumatra Province. The next result was that the labor variable had no partial effect on the economy of South Sumatra Province. Simultaneously, investment and labor have a significant and positive effect on the economic growth of South Sumatra Province.

The Effect of Regional Investment and Spending On Economic Growth

Sendi Gusnandar Arnan, Bachtiar Asikin, R. Wedi Rusmawan Kusumah — Thu, 05 Sep 2024 00:00:00 +0700

Economic growth signifies the progressive enhancement of a region's capacity to generate goods and services within a specific timeframe. Achieving high economic growth clearly indicates the successful progress of economic development. This research aims to ascertain the impact of Regional Investment and Expenditures on the Economic Growth of West Java Province. The investigation employed a descriptive methodology. The data was acquired from the Central Statistics Agency Report from 2015 to 2021. The data analysis technique uses the Multiple Linear Regression equation. The research findings indicate that investment and regional expenditure significantly impact economic growth.

The Influence Of Transformational Leadership And Work Motivation On Employee Performance

Handayani Hamidah Fauji, Adhie Fasha Nurhadian — Thu, 05 Sep 2024 00:00:00 +0700

This research is motivated by the significant competition between construction service providers in the Civil Water sector. This research was carried out in Bandung to learn about and analyze transformational leadership and communication on employee performance in one of the companies operating in Bandung's architectural, civil, mechanical, electrical, and environmental management consulting services. Employee performance generally focuses on transformational leadership and communication.

The research method used is quantitative, with a descriptive and verification approach. The sample used was 100 employees at a company engaged in architectural, civil, mechanical, electrical, and environmental management services in Bandung.

The research results show valid results for each statement item with a value of 0.3, and reliable results show a value above 0.7. For transformational leadership, (X1) is 0.784, Communication (X2) is 0.789, and Employee Performance (Y) is 0.780. From the value (R Square), it is known that the influence of transformational leadership (X1) and communication (X2) on employee performance (Y) is 0.810 or 81.0%. Leadership (X1), Communication (X2), and Employee Performance (Y) are in the relatively good category. The direct influence of transformational leadership (X1) is 13.3%. The direct influence of Communication (X2) is 32.1%. Employee performance is influenced by transformational leadership and communication by 81.0%, while the remaining 19.0% is caused by other variables or other factors that were not researched. From the research results above, it can be concluded that transformational leadership and communication significantly influence employee performance in one of the companies operating in the architectural, civil, mechanical, electrical, and environmental management consulting services in Bandung. The practical implications of these findings are that professionals in this field can enhance employee performance by adopting transformational leadership and effective communication strategies.

The Influence of Current Ratio, Net Profit Margin, Total Asset Turnover, And Debt to Equity Ratio on Share Prices in Manufacturing Companies in The Property and Real Estate Sector on The Indonesia Stock Exchange for the 2019-2021 Period

Natasya Fajriah, Hemima Franika Br Ginting, Herlin Munthe, Maduma Sari Sagala — Thu, 05 Sep 2024 00:00:00 +0700

Numerous industries provide investors with various funding options in today's rapidly evolving business and technology landscape. One particularly intriguing area in this regard is investment. Investment refers to allocating cash into various assets for a specific duration to generate profits, such as income or capital appreciation. Infrastructure development has led to the management of several industries, including property and real estate. Property can stimulate other economic sectors by providing employment opportunities and enhancing overall societal well-being. This is further bolstered by the rapid growth of the property sector, driven by the consistent availability of land and the rising public demand for housing and office spaces. Based on the data results, it is evident that there was an upsurge in demand for property and real estate in 2019. In contrast, production was sluggish expansion across all industries during the Covid-19 pandemic. Share prices will rise with increased demand and fall with less demand. This is evident in the company's effective management of shareholders. Financial reports are crucial for the company's future. Financial report data can be utilized as a decisive factor in decision-making. By assessing the financial performance of PT. Alam Sutera Reality Tbk, PT. Bumi Serpong Tbk, and PT. Bekasi Fajar Industri Estate Tbk, investors can make well-informed investment decisions. The liquid or illiquid ratio, which is based on the company's debt-to-equity ratio, current ratio, net profit margin, and total asset turnover, can be calculated to complete this assessment.

Business Network Analysis of Gurilem Crackers MSMEs In Cililin Sub-District, West Bandung Regency

Andi Sutisna, Resya Dwi Marselina, Pramia Andriana Putri — Thu, 05 Sep 2024 00:00:00 +0700

In order to mitigate the elevated unemployment rate in Indonesia, the community must investigate other business prospects, such as small and medium-sized enterprises (SMEs), exemplified by Gurilem Crackers. Gurilem Crackers, a small and medium-sized enterprise (SME), possesses a robust and established infrastructure encompassing business networks, production methods, marketing strategies, and financial resources. These elements contribute to the improvement of firm productivity and market competitiveness. The data gathering method employed is descriptive qualitative, including interviews and observations. This study examines the business network, production processes, marketing tactics, and finances of Gurilem Crackers SME, which Mang Teten owns in the Bongas hamlet. The research findings suggest that Mang Teten's company utilizes business networking by collaborating with Gurilem cracker suppliers, employs essential production tools, relies exclusively on word of mouth for Gurilem Cracker marketing, and achieves a monthly profit of Rp—1,236,000.00 with a profit margin of 8.9%.

Cultural Innovation in Indonesia as a Development of the Creative Economy

Thu, 05 Sep 2024 00:00:00 +0700

Culture is a part of life that regulates the norms and habits of society. Culture takes two forms: material culture and non-material culture. Through the Creative Economy Agency, the creative economy has been promoted as one of the new pillars of the Indonesian economy. This study aims to analyze the culture-based creative industry as an option for advancing the creative economy in Indonesia. This study applies the theory of economic development by Joseph Alois Schumpeter to emphasize the creativity of entrepreneurs in using existing production factors to support economic activity. Data was collected from secondary data related to the cultural and creative economy. The results show that the creative industry in Indonesia has emerged as the answer to the creative economy system and has also shown rapid development. Practically, in Indonesia, abundant opportunities exist for a culture-based creative economy, spanning various sectors such as arts and tourism, awaiting innovation by industry actors. Government facilitation and increasing engagement from individuals further support this burgeoning creative landscape, aligning with the Ministry of Tourism and Creative Economy/Tourism and Creative Economy Agency’s mission to bolster Indonesia's economy by 2030 through successful synergy between government and industry

Exports And Their Implications for The Position of Foreign Exchange Reserves in Indonesia 2005-2022

Thu, 05 Sep 2024 00:00:00 +0700

The purpose of this study was to determine the effect of oil and gas exports and non-oil and gas exports on the position of foreign exchange reserves in Indonesia for the period 2005–2022. The discussion of this research relates to oil and gas exports, non-oil and gas exports, and the position of foreign exchange reserves. In this regard, the approach taken is theories related to the field. This research was conducted in Indonesia. This type of research is quantitative research. The data used in this study are secondary data of the time series type in the form of publications on oil and gas exports, non-oil and gas exports, and the position of foreign exchange reserves from 2005 to 2022 obtained from the Central Bureau of Statistics. The research method used in this study is the explanatory method. The data analysis technique in this study is descriptive analysis and multiple linear regression analysis. The results of this study partially show that there is no effect of oil and gas exports on the position of foreign exchange reserves, while non-oil and gas exports have an effect on the position of foreign exchange reserves. Simultaneously, it shows that there is an influence of oil and gas exports and non-oil and gas exports on the position of foreign exchange reserves.

The Influence of Return On Assets (ROA), Debt To Equity Ratio (DER), Current Ratio (CR), Debt To Asset Ratio (DAR) On Stock Returns In Food And Beverage Sector Manufacturing Companies Listed On The Indonesia Stock Exchange For The Period 2018 - 2022

Thu, 05 Sep 2024 00:00:00 +0700

This study seeks to examine the impact of Return on Asset (ROA), Debt to Equity Ratio (DER), Current Ratio (CR), and Debt to Asset Ratio (DAR) on Stock Return in manufacturing companies within the food and beverage industry sector listed on the Indonesia Stock Exchange from 2018 to 2022. The study will analyze the relationship between these variables both individually and simultaneously. The approach employed in this study is a quantitative methodology. From 2018 to 2019, 28 food and beverage industry production enterprises comprised 80 samples. This study utilized purposive sampling and employed various statistical tests, including the partial t-test, simultaneous F-test, classical assumption test, and adjusted R-square test. The test results indicate a significant relationship between Return on Assets (ROA) and Return on Sales (RS), as evidenced by the p-value of 0.003, which is less than the significance level of 0.05. (2) In the SPSS T-test, a sig value of 0.499>0.05 indicates no significant influence of DER on RS. (3) The results of the SPSS testing using the T-test show that the significance value is 0.484, more significant than 0.05. This condition indicates that CR does not have a significant influence on RS. (4) Based on the findings of the statistical significance test (p-value of 0.134>0.05), it may be inferred that DAR does not have a significant influence on RS. The calculated value of f, 4.664, is greater than the critical value of 2.49, and the significance level of 0.003 is less than the threshold of 0.05. Therefore, we can infer that the null hypothesis (H0) is rejected and the alternative hypothesis (Ha) is accepted. The Adjusted R Square value is 0.194, indicating that the independent variables can explain 19.4% of the variation in Y (RS). Other factors influence the remaining 80.6% of the variation.

Use Of Information Technology, Accounting Information Systems, Internal Control on The Quality of Financial Reporting Village-Owned Enterprises Ogan Ilir

Fitri Yusnita, Indah Khairunnisa, Peny Cahaya Azwari — Thu, 05 Sep 2024 00:00:00 +0700

This study aims to evaluate how information technology deployment affects financial reporting quality. 2) Find out how accounting information systems impact financial report standards. 3) Evaluate how internal control affects the dependability and correctness of financial accounts. 4) Analyze the impact of internal control, accounting information systems, and information technology on the reliability and accuracy of financial reports. A quantitative research methodology is used in this investigation. The population under investigation consists of all Village-Owned Enterprises in Ogan Ilir Regency, totaling 227 Village-Owned Enterprises. Purposive sampling, based on predetermined criteria, is the method used for sampling in this study. The requirements encompass Village-Owned Enterprises that now employ information technology, apply accounting information systems, and implement internal control. These standards are used to obtain 92 samples that meet the requirements. This study uses the Eviews 12 software for data analysis. The use of information technology positively and significantly impacts the quality of financial reporting. Accounting information systems positively and significantly impact financial reporting quality. Both independent factors and the internal control variable have a considerable and favorable impact on the quality of financial reporting.

The Influence of Moderation Leverage on The Relationship Between Profitability and Firm Value

Nuryaman Nuryaman, Eriana Kartadjumena, Dudi Abdul Hadi — Thu, 05 Sep 2024 00:00:00 +0700

Capital market investors anticipate their investments will appreciate and progress in line with their investment objectives, specifically to enhance investor well-being. The investment value appreciates when the issuer's share price or firm value rises. Several variables can impact the value of a company, with profitability and leverage being two significant influences. Prior studies have presented empirical proof that a firm's profitability and leverage can impact its value. This study examines the moderating impact of leverage on the association between profitability and company value. The study employed data from companies listed on the Indonesia Stock Exchange between 2019 and 2021. Currently, there are no studies that have investigated the impact of leverage as a moderating factor on the relationship between profitability and firm value. The data analysis revealed a strong positive correlation between profitability and firm valuation. Significant leverage levels have a considerable negative effect on a corporation's value. The interaction variable of profitability and leverage has a minimal effect on the relationship between profitability and firm value. The test results suggest that leverage modifies, diminishing the link between profitability and company value. However, it is essential to note that leverage is not demonstrated to be a substantial moderating variable in this relationship.

Implementation of SAK-EMKM: The Influence of Socialization, Understanding Accounting and Readiness of MSMEs

Nurhani Patmawati, Devi Astriani, Trias Arimurti — Thu, 05 Sep 2024 00:00:00 +0700

The objective of this study is to examine the impact of socialization, accounting comprehension, and readiness of micro, small, and medium enterprises (MSMEs) on the implementation of financial statement preparation based on the Indonesian Financial Accounting Standards for Micro, Small, and Medium Enterprises (SAK-EMKM). The research method is categorized as quantitative research. The study utilizes primary data in the form of a questionnaire. The study focused on the population of Micro, Small, and Medium Enterprises (MSMEs) that actively took part in the UMKM Juara program in the Karawang Regency during the year 2022. The sampling technique employed was saturation sampling, wherein the whole population under study was sampled. The utilized specimen had a value of 132. The findings indicated that partial socialization positively and significantly influences the implementation of financial statement preparation based on SAK-EMKM.

On the other hand, an understanding of accounting has little impact on implementing financial statement preparation based on SAK-EMKM. Additionally, MSME readiness significantly affects the implementation of financial statement preparation based on SAK-EMKM. The concurrent processes of socialization, comprehension of accounting principles, and preparedness of MSMEs have a favorable and substantial impact on the execution of financial statement preparation based on SAK-EMKM.

The Influence Of Brand Image And Customer Trust On Customer Loyalty Through Customer Satisfaction With Gender As A Moderation Variable

Salsabiila Salsabiila, Titis Miranti — Thu, 05 Sep 2024 00:00:00 +0700

This study aims to investigate the impact of brand image and customer trust on customer loyalty, mediated via customer satisfaction. Gender is employed as an independent variable to mitigate the impact of brand image and customer trust variables on customer loyalty. This study utilized data from 250 respondents who completed a questionnaire issued to BSI customers in the Malang Raya area. Purposive sampling and proportional random sampling are two distinct methods used for sampling. A proportional random sampling method was employed to ensure that the percentage of respondents from Malang City, Malang Regency, and Batu City was maintained. The research used the Structural Equation Modeling - Partial Least Squares (SEM-PLS) approach. These data indicate that brand image and customer satisfaction substantially impact customer loyalty. However, customer trust does not have a significant effect on customer loyalty.

Moreover, the brand's image and the level of consumer trust notably impact customer satisfaction. The findings of this study indicate that customer satisfaction serves as an intermediary variable that influences brand image and consumer trust, ultimately affecting customer loyalty. In addition, gender cannot reduce the impact of brand image and customer trust.

Switching Intention in Halal Cosmetics Products

Yessy Fortunania Sutanto, Auditia Setiobudi, Kezia Novtavia Sugiharto — Thu, 05 Sep 2024 00:00:00 +0700

The purpose of this research is to examine the switching intention towards Wardah Cosmetics products using the push-pull-mooring theory. The push factors tested in this study are dissatisfaction with the brand image factor, and the mooring factor is switching cost The technique used in this study is purposive sampling. 120 samples of non-Wardah users were obtained through an online questionnaire. The data analysis method uses multiple linear regression modelling. This study found that there is an influence of push factors and pull factors on switching intention. The mooring factor in this study (switching cost) was found to have no significant effect on switching intention. The results of this study can be used to understand the switching intention in cosmetics products with the help of the push-pull-mooring theory.

Thrift Business Network Analysis at Happy Thrift Stuf

Nana Heriana, Resya Dwi Marselina, Santi Nurul Adha, Alna Azzahra Nur S — Thu, 05 Sep 2024 00:00:00 +0700

This study aims to comprehend and examine the functioning of the thrift business network at Happythrifstuff. The data collection methods utilized in this study encompass interviews and documentation. The research methodology is a descriptive qualitative approach, which entails collecting, organizing, and presenting data obtained during the study to achieve precise and thorough information. The data suggest that the thrift business network at Happythrifstuff acquires items from Bandung (Gede Bage), which are obtained from distributors in Batam (Sumatra), with the leading suppliers in Korea and Japan. The analysis indicates that the thrift company is well-suited for students or individuals who want to establish an enterprise with relatively small cash and the potential for profitable earnings. This is apparent from the original capital expenditure of 40 goods amounting to Rp. 5,740,000, resulting in Rp profit revenue. 1,148,000 from the sale of 40 products. This essay aims to inspire individuals to engage in the second-hand goods industry, to create cash, and to assist in fulfilling everyday necessities.

The Influence of Financial Ratios on Financial Distress in Manufacturing Companies in the Consumer Goods Industry Sector Listed on the Indonesian Stock Exchange

Siswanto Siswanto — Thu, 05 Sep 2024 00:00:00 +0700

The objective of this study is to ascertain the financial ratios, specifically the Cash Ratio, Return on Investment (ROI), Return on Equity (ROE), and Net Profit Margin (NPM), of Financial Distress in Manufacturing Companies within the Consumer Goods Industry Sector that are listed on the Indonesian Stock Exchange. This study employs quantitative data. The findings and analysis presented in this study are as follows: The multiple linear regression test results indicate that the t-count value is 10.625, more significant than the t-table value of 2.03951. Additionally, the significance level of the t-count is 0.001, which is less than the significance level of 0.05. Therefore, we may infer that the t-count value is statistically significant. The ROI multiple linear regression test results indicate that the t-count value of 2.886 is statistically significant with a p-value of 0.007, compared to a t-table value of 2.03951 and a significance level of 0.05. Therefore, we can infer that the t-count value of 2.886 is significant. The t-value is 2.03951, and the significance level is 0.007, less than 0.05. The multiple linear regression analysis shows that the t-count for ROE is -2.897, which has a significance level of 0.007. Comparing this with the t-table value of 1.69552 at a significance level of 0.05, we may infer that the t-count value of 2.897 is greater than the t-table value of 1.69552, and the significance level of 0.007 is less than 0.05. The multiple linear regression analysis shows that the t-count value for NPM is -1.095, with a significance level of 0.282. Comparing this to the t-table value of 1.69552 at a significance level of 0.05, we may conclude that the t-count value of 1.095 is less than the t-table value and is not statistically significant. The F-table test yielded a result of 2.67 with an error rate of 5%. The acquired F-count was 50.596, more significant than the F-table value of 2.67, indicating a significant difference with a significance level of 0.002, less than the threshold of 0.05.

The Role of Satisfaction in Mediating Self-Service Technology (SST) on Customer Loyalty

Izzatunnisa' Habiba Shalsabila, Rini Safitri — Thu, 05 Sep 2024 00:00:00 +0700

Economic growth refers to the gradual improvement of a region's ability to produce products and services over a certain period of time. Attaining a substantial increase in economic output undeniably demonstrates the effective advancement of economic development. This study seeks to determine the influence of Regional Investment and Expenditures on the Economic Growth of West Java Province. The inquiry utilized a descriptive methodology. The data was obtained from the Central Statistics Agency Report spanning the years 2015 to 2021. The data analysis technique use the Multiple Linear Regression equation. The research results suggest that both investment and regional expenditure have a substantial influence on economic growth

Employee Performance: The Impact of Reward and Incentive

Elly Romy — Thu, 05 Sep 2024 00:00:00 +0700

This study sought to ascertain the impact of rewards and incentives for top-performing employees on employee morale at Manufacturing Company. The study population consisted of 180 employees at Manufacturing Company. The sample was selected using the random sampling approach. The sample size in this study consisted of 45 employees. This research falls under the category of quantitative research. Quantitative research focuses on measurable research objects and uses numerical or ratio-based variables to address specific problem formulations or test stated hypotheses. The multiple regression analysis yielded the equation Y = 5,263 + 0,422X1 + 0,447X2 + e, indicating that rewards and incentives had a statistically significant positive impact on staff morale. Concurrently, the outcomes of the test (t) or partial test indicate that awards favorably and favorably impact staff morale. Where is the value of t count 3.286 visible? The t-table value of 2.01808 and the significance value of 0.002 indicate that the influence of the incentive variable on employee morale is positive and substantial. The t-count value of 3.693 further supports this finding. Similarly, the t-table value of 2.01808 and the significance value of 0.001 indicate a significant effect of the incentive variable on employee morale, with ? set at 0.05. The coefficient of determination was determined to be 0.681. The independent variables, reward, and incentives, account for 68.1% of the variation in the employee morale variable. The remaining 31.9% is attributed to other variables not included in the model.

Hacking Profits in Real Estate: The Influence of Capital Structure, Liquidity, and External Factors

Faizul Mubarok, Farhan Putra Pramudya, Muhammad Ziyad Izzuddin — Thu, 05 Sep 2024 00:00:00 +0700

This study seeks to empirically examine the influence of capital structure, liquidity, firm value, firm size, and external factors on profitability within companies operating in the property and real estate sector listed on the Indonesia Stock Exchange, utilizing sample data from 2018 to 2022. Through purposive sampling, 10 companies were selected as research subjects, employing panel data regression analysis. The findings indicate that liquidity and company size have a negative and significant impact on profitability. Conversely, inflation exerts a positive and significant influence on profitability. However, neither capital structure nor firm value significantly affect profitability. These results contribute to understanding the factors influencing the profitability of property and real estate sector companies within the Indonesian capital market context.

Determinants of Financial Performance in Influencing Inclusivity of Sharia Pension Fund Participants in Indonesia

Muhammad Fatchullah El Islami Fatchul, Siti Eniyatul Uyun; Nur Diana Khalida — Thu, 05 Sep 2024 00:00:00 +0700

Financial planning in old age is very important to do in order to prepare for the guarantee of life in old age. Sharia pension funds are a means that facilitate participants in meeting their needs in retirement. This study aims to provide empirical evidence related to the relationship between ROI, RITA, and Liability financial performance to the inclusion of Sharia pension fund participants in Indonesia. This type of research uses quantitative associative. The research data source uses secondary data from the publication of Sharia IKNB statistics on the Financial Services Authority website. The research sample was 17 quarterly data in the period 2019-2023. Research Object on Sharia Pension Fund companies in Indonesia. Data collection techniques through a literature study of journal articles and official websites indirectly supporting research literature. Data analysis using multiple linear regression. The results showed partially that Return on Investment (ROI) did not have a negative effect on Sharia Pension Fund Inclusion, Investment to Asset Ratio (RITA) had a positive effect on Sharia Pension Fund Inclusion, and Liabilities had a positive effect on Sharia Pension Fund Inclusion. Meanwhile, simultaneously independent variables (ROI, RITA, and Liability) significantly affect the positive effect of Sharia Pension Fund Inclusion in Indonesia.

Analysis of Labor Absorption in Small and Medium Enterprises in East Java

Mohammad Rizal, Arini Fitria Mustapita — Thu, 05 Sep 2024 00:00:00 +0700

Small and medium businesses in East Java as a mainstay sector in labor absorption tend to fluctuate. The problem in this research is how the number of business units, investment and minimum wages correlate with labor absorption in the small and medium enterprise sector in East Java Province. The aim of this research is to analyze the number of business units, investment and minimum wages on labor absorption in the small and medium business sector in East Java Province. The research results obtained by correlation testing the number of SMEs have a significant positive relationship to the labor absorption, investment has a significant positive relationship to the labor absorption and the minimum wage also has a significant positive relationship to the labor absorption. The results of this research indicate that SMEs managers should provide direct credit financing facilities. both bureaucratic and according to the interest rates given, so that government investment which tends to be more capital intensive can be absorbed by SMEs well as well as business training, books and the internet in searching for market information and business management methods so that their businesses can develop more effectively.