The Impact of the Existence of Village-Owned Enterprises (BUMDes) Business Sectors on Village Development in Indonesia

ABSTRACT: Through various policy programs, the government provides stimuli for villages to manage their existing potentials, enabling them to develop independently and improve their economy. BUMDes (Village-Owned Enterprises) is one of the government's flagship programs in village development, performing its role as an economic and social institution. The existence of BUMDes is expected to enhance economic self-reliance and community welfare. This research aims to empirically analyze the influence of business sectors and the number of businesses managed by BUMDes on the level of village development in Indonesia. By using the Propensity Score Matching method and linear regression on BUMDes data between 2019 and 2021, this research concludes that BUMDes engaged in social and commercial sectors have a significant impact on the level of village development. However, an increasing number of businesses operated actually decreases the effectiveness of the presence of the Business Sector of BUMDes on village development