Available online at https://journal.
com/index.
php/ijrcs/index International Journal of Research in Community Service e-ISSN: 2746-3281 p-ISSN: 2746-3273 Vol.
No.
2, pp.
77-84, 2026
Enhancing Community Economic Independence through Capacity-Building Training Services: The Mediating Role of MSME Development Strategies Deva Putra1*.
Dede Irman Pirdaus2.
Rifki Saefullah3 Communication in Research and Publications.
Bandung.
Indonesia Faculty of computer science.
University of informatics and business.
Bandung.
Indonesia *Corresponding author email: devazxone@gmail.
Abstract The role of Micro.
Small, and Medium Enterprises (MSME.
in strengthening community economic independence has become increasingly important, particularly in developing countries.
However, many MSMEs still face challenges related to limited managerial capacity, low financial literacy, and ineffective business strategies.
This study aims to analyze the effect of capacitybuilding training services on community economic independence, with MSME development strategies acting as a mediating A quantitative approach was employed using Structural Equation ModelingAePartial Least Squares (SEM-PLS) to test the relationships among variables.
The results indicate that capacity-building training services have a significant positive effect on MSME development strategies and community economic independence.
Furthermore.
MSME development strategies significantly influence economic independence, demonstrating their role in improving business performance and sustainability.
The mediation analysis reveals that MSME development strategies partially mediate the relationship between training services and economic independence, indicating that training becomes more effective when translated into practical business strategies.
This study highlights the importance of integrating training programs with strategic implementation to achieve sustainable economic outcomes.
The findings provide both theoretical and practical contributions by emphasizing the role of strategy as a key mechanism in transforming capacity building into economic independence.
Therefore, policymakers and practitioners are encouraged to design training programs that focus not only on knowledge transfer but also on the development of actionable business strategies.
Keywords: Capacity building, training services.
MSME development, economic independence, community empowerment Introduction The role of Micro.
Small, and Medium Enterprises (MSME.
in the economy is becoming increasingly strategic, particularly in creating jobs, reducing poverty, and improving community welfare.
MSMEs not only serve as the backbone of the local economy but also serve as a crucial instrument in fostering sustainable economic independence.
In this context, strengthening the capacity of MSMEs is a key factor in increasing competitiveness and business sustainability amidst increasingly complex global economic dynamics (Junaidi et al.
, 2025.
Irawan & Aris, 2.
However.
MSMEs still face various challenges, particularly related to limited human resources, low financial literacy, and a lack of ability to formulate effective business strategies.
This situation results in many MSMEs being unable to develop optimally and remaining dependent on external assistance.
Therefore, interventions in the form of structured and sustainable training programs are needed to increase the capacity of business actors (Hasyim & Bakri.
Safita et al.
, 2.
Capacity-building training services are a widely used approach in MSME empowerment efforts.
This training covers various aspects, such as financial management, marketing strategies, and entrepreneurial skills development.
Research shows that appropriate training can improve the competence of MSMEs, both in terms of knowledge and practical skills in business management (Hasyim & Bakri, 2025.
Junaidi et al.
, 2.
Furthermore, the success of training in improving MSME performance depends not only on knowledge transfer but also on the ability of entrepreneurs to implement that knowledge into concrete business strategies.
MSME
development strategies, such as product innovation, marketing digitalization, and effective financial management, are crucial factors in determining business success (Purnomo & Purwandari, 2025.
Safita et al.
, 2.
In the context of community empowerment.
MSME development strategies also serve as a bridge between increasing individual capacity and achieving economic independence.
This demonstrates that training does not directly Putra et al.
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generate economic impact, but rather through the process of internalizing and implementing business strategies by MSMEs.
In other words.
MSME development strategies serve as a mediating variable linking training to the ultimate outcome of community economic independence (Kasmo et al.
, 2.
Furthermore, community-based economic empowerment demonstrates that active community involvement in economic activities can enhance collective social and economic resilience.
Collaboration among MSME actors and support from various parties, such as the government and facilitators, are crucial factors in creating a sustainable economic ecosystem (Awaluddin et al.
, 2026.
Najih & Fauzan, 2.
The role of facilitators and mentors in the capacity building process cannot be overlooked.
Facilitators serve as a bridge between theory and practice, assisting MSMEs in identifying business opportunities and challenges.
Effective mentoring can enhance the successful implementation of business strategies and accelerate the process of economic independence (Najih & Fauzan, 2.
Furthermore, a local wisdom-based approach to community empowerment is also a crucial factor in increasing the effectiveness of training programs.
Integrating local values into MSME development strategies can strengthen business identity and increase competitiveness in an increasingly competitive market (Ishak, 2.
This also aligns with efforts to develop a sustainable community-based economy.
Equally important, the role of specific groups, such as women, in MSME development also contributes significantly to community economic empowerment.
Women's involvement in MSME-based economic activities not only increases family income but also strengthens the social and economic structure of the community (Visiana.
Based on this description, there remains a research gap regarding the mechanisms by which capacity building-based training can enhance community economic independence.
Most studies focus solely on the direct relationship between training and MSME performance, without considering the role of MSME development strategies as a mediating Therefore, this study aims to analyze the influence of capacity-building training services on community economic independence by considering the mediating role of MSME development strategies.
Literature Review Theoretical Basis Capacity-Building Training Services Capacity-building training services are systematic efforts to improve the abilities, skills, and knowledge of individuals and groups so they can manage their businesses effectively and sustainably.
In the context of MSMEs, this training covers various important aspects such as financial management, marketing strategy, and entrepreneurial Structured training has been proven to improve business owners' understanding of business management and boost their confidence in running a business (Hasyim & Bakri, 2.
Furthermore, training also serves as a means of transferring practical and applicable knowledge.
Need-based and participatory training programs can increase MSME engagement and accelerate the adoption of new skills.
This is supported by research by Dahlena et al.
, which shows that practice-based training can significantly improve managerial competence and productivity in MSMEs.
From a theoretical perspective, capacity building is closely related to Human Capital Theory, which states that investment in education and training will improve the quality of human resources and impact productivity.
Training is a form of investment that generates economic value by improving individuals' abilities to manage businesses effectively (Indrawan et al.
, 2.
MSME Development Strategies An MSME development strategy is a series of steps designed to improve competitiveness, sustainability, and business performance.
This strategy encompasses various aspects such as product innovation, digital marketing, financial management, and strengthening business networks.
In practice, an MSME development strategy is a crucial factor in optimizing the results of training programs (Purnomo & Purwandari, 2.
Developing an effective business strategy enables MSMEs to adapt to market changes and enhance their competitive advantage.
The integration of financial literacy and marketing strategies has been shown to improve operational efficiency and expand MSME market reach (Hasyim & Bakri, 2.
This demonstrates that business strategy serves not only as an operational tool but also as a mechanism for transforming knowledge into practical From a theoretical perspective, this concept can be explained through the Resource-Based View (RBV), which emphasizes that a business's competitive advantage is determined by its ability to effectively manage internal Resources such as knowledge, skills, and innovation are strategic assets that can sustainably improve MSME performance (Kustiningsih et al.
, 2.
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Community Economic Independence Community economic independence is a condition in which individuals or groups are able to meet their economic needs independently without relying on external assistance.
In the context of MSMEs, economic independence is characterized by increased income, business stability, and the ability to survive in the face of economic challenges.
MSMEs play a crucial role in creating economic independence because they absorb labor and increase local economic activity.
Effective MSME development can encourage inclusive economic growth and improve overall community welfare (Irawan & Aris, 2026.
Awaluddin et al.
, 2.
Furthermore, a community-based empowerment approach also contributes to increasing economic independence.
Collaboration between business actors and support from various parties can create a strong and sustainable economic This demonstrates that economic independence is not only individual but also collective (Visiana, 2.
Community Empowerment Theory Community empowerment theory emphasizes the process of increasing the capacity of individuals and groups to independently control and manage their resources.
Empowerment focuses not only on economic growth but also on increasing community awareness, participation, and independence.
A local wisdom-based empowerment approach demonstrates that integrating cultural values and local potential can increase the effectiveness of empowerment Training tailored to the local context has been shown to increase community participation and the success of MSME development programs (Ishak, 2.
The Role of Training in MSME Development Training plays a strategic role in increasing the capacity of MSMEs, especially in facing increasingly fierce global Entrepreneurship, management, and technology training can improve entrepreneurs' abilities to manage their businesses professionally (Junaidi et al.
, 2.
Furthermore, training also serves as a catalyst for improving MSME productivity and performance.
Siantar et al.
showed that entrepreneurship training has a positive impact on MSME productivity, especially when supported by access to capital and government policies.
Mentoring and the role of facilitators are also crucial factors in the success of training.
Mentors help MSMEs apply the knowledge they gain and provide strategic direction for business development (Najih & Fauzan, 2.
Previous Research Various studies have shown that capacity building has a significant impact on MSME development and community economic empowerment.
Hasyim and Bakri .
found that training integrating financial management and marketing strategies significantly improved MSME performance.
Furthermore.
Safita et al.
developed a model for strengthening MSME financial capacity that contributes to business sustainability.
Other research shows that community-based empowerment can increase community economic resilience through collaboration and collective awareness (Awaluddin et al.
, 2.
Meanwhile.
Kasmo et al.
emphasized the important role of entrepreneurship training in increasing economic independence, particularly among women.
However, most research still focuses on the direct relationship between training and MSME performance or economic There are still limitations in explaining the mechanisms by which such training translates into tangible economic outcomes.
Methodology Design of the Study This study employs a quantitative approach with an explanatory research design to examine the causal relationships between variables, namely capacity-building training services.
MSME development strategies, and community economic independence.
This design aims to analyze both direct and indirect effects among variables through hypothesis testing.
The object of this study is MSMEs that have participated in capacity-building training programs.
These MSMEs are selected because they have direct experience with training services and business development practices.
The respondents consist of MSME actors who meet the following criteria: .
actively running a business, .
having participated in at least one training program, and .
operating their business for a minimum of six months.
The data used in this study are primary data collected through structured questionnaires.
The questionnaire is designed using a Likert scale ranging from 1 .
trongly disagre.
to 5 .
trongly agre.
to measure respondentsAo perceptions of training services.
MSME development strategies, and community economic independence.
The conceptual framework of this study is based on Human Capital Theory and Resource-Based View (RBV).
Training services are expected to improve the capacity, knowledge, and skills of MSME actors.
These improvements Putra et al.
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are then translated into business strategies that enhance the performance and sustainability of MSMEs.
Ultimately, these strategies contribute to strengthening community economic independence.
In this study.
MSME development strategies act as a mediating variable that links training services to economic The structural relationships tested include: .
the influence of capacity-building training services on MSME development strategies, .
the influence of MSME development strategies on community economic independence, and .
the direct influence of training services on community economic independence.
The conceptual framework of this study is illustrated in Figure 1, which shows both direct and indirect relationships among variables.
Figure 1: Conceptual framework of the study Based on Figure 1, the model demonstrates that capacity-building training services influence community economic independence both directly and indirectly through MSME development strategies.
This indicates that training alone may not be sufficient to achieve economic independence unless it is translated into effective business strategies.
Based on this framework, the hypotheses of the study are formulated as follows:
H1: Capacity-building training services have a positive effect on MSME development strategies.
H2: MSME development strategies have a positive effect on community economic independence.
H3: Capacity-building training services have a positive effect on community economic independence.
H4: MSME development strategies mediate the relationship between capacity-building training services and community economic independence.
Methods This study employs Structural Equation ModelingAePartial Least Squares (SEM-PLS) as the main analytical approach to examine the relationships among variables, including the mediating effect of MSME development SEM-PLS is selected due to its suitability for complex models, its ability to handle small sample sizes, and its flexibility in dealing with data that do not require strict normality assumptions.
The analysis is conducted in two main stages, namely the evaluation of the measurement model .
uter mode.
and the structural model .
nner mode.
The measurement model is evaluated to ensure the validity and reliability of the constructs.
Convergent validity is assessed by examining the loading factor of each indicator, where a value greater than 0.
7 indicates acceptable Furthermore, the Average Variance Extracted (AVE) is used to measure the amount of variance captured by the construct relative to measurement error, as shown in Equation .
A construct is considered valid if the AVE value exceeds 0.
In addition.
Composite Reliability (CR) is used to assess internal consistency reliability, as presented in Equation .
A construct is deemed reliable if the CR value is greater than 0.
7, indicating consistency among indicators in measuring the latent variable.
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The structural model is evaluated to examine the relationships between variables and to test the proposed The coefficient of determination (RA) is used to assess the explanatory power of the model, as shown in Equation .
xplained ariance Total ariance .
The strength and direction of relationships between variables are determined using path coefficients ( ), while hypothesis testing is conducted through a bootstrapping procedure.
The statistical significance of each relationship is evaluated using the t-statistic, as expressed in Equation .
A hypothesis is accepted if the t-value exceeds 1.
96 at a significance level of 0.
Finally, the mediating effect of MSME development strategies is examined by calculating the indirect effect, which represents the product of the path coefficients between the independent, mediating, and dependent variables, as shown in Equation .
ndirect ffect A significant indirect effect indicates that MSME development strategies play a mediating role in the relationship between capacity-building training services and community economic independence.
Results and Discussion Respondent Profile The respondents in this study consist of MSME actors who have participated in capacity-building training Based on the collected data, most respondents have been operating their businesses for more than one year, indicating that they have sufficient experience in evaluating training outcomes and business development strategies.
The majority of respondents are engaged in trade and service sectors, followed by small-scale production businesses.
This distribution reflects the general structure of MSMEs, where sectors with lower capital requirements tend to Overall, the respondent profile indicates that the data are relevant and appropriate for analyzing the relationships among training services.
MSME strategies, and economic independence.
Measurement Model Evaluation (Outer Mode.
The evaluation of the measurement model aims to assess the validity and reliability of the constructs used in this Convergent validity is first examined through the loading factor values of each indicator.
As presented in Table 1, all indicators have loading factor values above 0.
7, indicating that they meet the required threshold for convergent Table 1: Outer Model Evaluation Results Indicator Loading Factor Putra et al.
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As shown in Table 1, all indicators demonstrate strong correlations with their respective constructs, confirming that the measurement items are valid and suitable for further analysis.
Furthermore, the reliability and validity of the constructs are evaluated using Average Variance Extracted (AVE) and Composite Reliability (CR).
The results are presented in Table 2.
Table 2: Reliability and Validity Results Variable Training Services (X) MSME Strategies (Z) Economic Independence (Y) AVE As indicated in Table 2, all AVE values exceed 0.
5, suggesting that the constructs capture more than half of the variance of their indicators.
In addition, all CR values are above 0.
7, confirming strong internal consistency.
These results indicate that the measurement model is both valid and reliable.
Structural Model Evaluation (Inner Mode.
The structural model evaluation is conducted to examine the relationships between variables and to assess the explanatory power of the model.
The coefficient of determination (RA) is used to evaluate how well the independent variables explain the dependent variables.
The results are presented in Table 3.
Table 3: Coefficient of Determination (RA) Variable MSME Strategies (Z) Economic Independence (Y) RA As shown in Table 3, the RA value for MSME development strategies is 0.
542, indicating that capacity-building training services explain 54.
2% of the variance in MSME strategies.
Meanwhile, the RA value for community economic independence is 0.
638, indicating that training services and MSME strategies jointly explain 63.
8% of the These values suggest that the model has moderate to strong explanatory power.
The relationships between variables are further analyzed using path coefficients and hypothesis testing through The results are presented in Table 4.
Table 4: Path Coefficient and Hypothesis Testing Relationship XIeZ ZIeY XIeY t-value Result Supported Supported Supported As presented in Table 4, capacity-building training services have a strong and significant effect on MSME development strategies ( = 0.
This indicates that training plays a crucial role in improving the strategic capabilities of MSME actors.
Furthermore.
MSME development strategies significantly influence community economic independence ( = 0.
, suggesting that effective strategies contribute directly to improved economic The direct effect of training services on economic independence is also significant ( = 0.
, although the magnitude is relatively smaller compared to the indirect effect.
To further examine the mediating role of MSME development strategies, a mediation analysis is conducted.
The results are shown in Table 5.
Table 5: Mediation Effect Relationship XIeZIeY Indirect Effect t-value Result Significant As shown in Table 5, the indirect effect of training services on economic independence through MSME development strategies is significant.
Since both the direct and indirect effects are significant, this indicates a partial mediation This suggests that MSME development strategies act as an important mechanism through which training services influence economic independence.
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Discussion The findings of this study confirm that capacity-building training services have a significant positive effect on MSME development strategies.
This result supports Human Capital Theory, which states that investment in training and education enhances individual capabilities, leading to improved productivity and performance.
In the context of MSMEs, training provides essential knowledge and skills that enable business actors to better manage their This finding is consistent with previous studies by Hasyim and Bakri .
and Junaidi et al.
which demonstrated that training programs significantly improve managerial competence, financial literacy, and marketing capabilities among MSME actors.
Furthermore, the results indicate that MSME development strategies have a significant effect on community economic independence.
This finding aligns with the Resource-Based View (RBV), which emphasizes that internal resources, such as knowledge, skills, and innovation, are critical determinants of competitive advantage and business MSME actors who are able to translate their capabilities into effective strategies, such as product innovation, digital marketing, and financial management, are more likely to achieve sustainable economic outcomes.
This result is in line with studies by Purnomo and Purwandari .
and Safita et al.
, which highlight the importance of strategic capability in enhancing MSME performance and long-term sustainability.
The direct effect of capacity-building training services on community economic independence is also found to be significant, although its magnitude is relatively smaller compared to the indirect effect.
This suggests that training alone is not sufficient to directly generate economic independence unless it is supported by the implementation of appropriate business strategies.
This finding reinforces the argument presented in previous studies that emphasize the importance of transforming knowledge into practice (Kasmo et al.
, 2.
In other words, training must go beyond knowledge transfer and focus on practical application to produce meaningful economic impacts.
The mediation analysis further reveals that MSME development strategies partially mediate the relationship between training services and community economic independence.
This finding provides empirical evidence supporting the concept of community empowerment theory, which emphasizes that empowerment is a process involving capacity building followed by the effective utilization of that capacity.
The role of MSME strategies as a mediating variable indicates that economic independence is achieved through a structured process, where training enhances capacity, which is then implemented through strategic actions.
This result addresses the research gap identified in previous studies, which often overlook the mediating mechanism between training and economic Moreover, the findings highlight the importance of integrating training programs with mentoring and facilitation As noted by Najih and Fauzan .
, facilitators play a crucial role in bridging the gap between theoretical knowledge and practical implementation.
This suggests that the effectiveness of training programs depends not only on the content delivered but also on the support systems that enable MSME actors to apply their knowledge in real business contexts.
In addition, the results can also be interpreted within the framework of community-based economic empowerment.
The improvement of MSME strategies contributes not only to individual economic independence but also to collective economic resilience.
This supports the findings of Awaluddin et al.
, which emphasize that collaboration and collective awareness among MSME actors strengthen the sustainability of the local economic ecosystem.
Finally, this study also implicitly supports the importance of contextual and inclusive approaches in MSME As highlighted by Ishak .
, integrating local wisdom into empowerment strategies can enhance the effectiveness of training programs.
Similarly, the role of women in MSMEs, as emphasized by Visiana .
, indicates that inclusive participation further strengthens community economic independence.
Therefore, training programs should be designed to accommodate local contexts and encourage participation from diverse community Conclusion This study has examined the influence of capacity-building training services on community economic independence by considering the mediating role of MSME development strategies.
Using a quantitative approach with SEM-PLS analysis, the study provides empirical evidence on both direct and indirect relationships among the The results show that capacity-building training services significantly improve MSME development strategies, indicating that training plays a crucial role in enhancing the managerial and strategic capabilities of MSME Furthermore.
MSME development strategies are proven to have a strong positive effect on community economic independence, highlighting the importance of translating knowledge and skills into effective business Although training services also have a direct impact on economic independence, the indirect effect through MSME strategies is more substantial, demonstrating that training becomes more effective when it is implemented through structured and practical strategies.
The mediation analysis confirms that MSME development strategies partially mediate the relationship between training services and community economic independence.
This finding suggests that economic independence is not Putra et al.
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achieved solely through training, but through a process in which capacity building is followed by the application of appropriate business strategies.
Therefore.
MSME development strategies serve as a key mechanism linking training interventions to economic outcomes.
In conclusion, this study contributes to the understanding of MSME empowerment by emphasizing the importance of integrating training programs with strategic implementation.
Practically, the findings imply that policymakers and practitioners should design training programs that not only focus on knowledge transfer but also emphasize the development and application of business strategies.
Such an approach is essential to achieving sustainable community economic independence.
References