Abstract:

The paper aims to examine the effects of local culture, government role, and entrepreneurial behavior on the SMEs performance. A total of 270 questionnaires was distributed to the Papuan entrepreneurs who are currently running their SMEs in the agribusiness industry, and a sample of 250 returned-questionnaires was used for further analysis. We employed the path analysis and structural equation model to investigate the relationship the determinants of indigenous economic growth and SMEs performance. The results proved that the effects of local culture and government's role were stronger and significant through the intermediating variable entrepreneurial behavior. This indirect influence revealed that self-employed behavior was the medium to enhance and strengthen the SMEs performance. This denotes that the nexus of local culture-government role-entrepreneurial behavior plays a vital role in promoting entrepreneurship development. In addition, discussions, implications, as well as conclusions of the study were also highlighted.