The Effect of Managerial Ownership on the Financial Performance of MSMEs: A Profitability Enhancement Perspective

This study aims to analyze the effect of managerial ownership on the financial performance of MSMEs in Pacitan, especially in increasing profitability. By using a quantitative quantitative approach, data from 113 MSMEs was analyzed through the simple linear regression method. method. The results showed that managerial ownership has significant influence on financial performance, with a value of R=0.645R=0.645 and R2=41.6%R^2 = 41.6%. This means that about 41.6% of the variation in the financial performance of MSMEs is explained by the level of managerial ownership. This finding suggests that managers who also own shares tend to make strategic decisions that increase efficiency and profitability. However, 58.4% of the variation in MSMEs' financial performance is influenced by other factors such as access to capital, operational efficiency, and managerial capability. In the context of context of MSMEs in Pacitan, these results provide an important foundation for designing more effective management strategies. The findings have practical implications for local government, financial institutions, and MSME players in optimizing ownership structure to improve competitiveness. By understanding the role of managerial ownership, MSMEs are expected to be more competitive in local and regional markets. This research highlights the importance of an integrated approach in management of MSMEs to support business growth and sustainability.