Social Innovation as A Transmission Mechanism: How Government Commitment Translates Into Socio-Economic Development In Emerging Markets

This study examines the mediating roles of socio-economic inclusion in interactions among social innovation, economic results, and government commitment among developing countries. Partial least squares structural equation modeling (PLS-SEM) was utilized for examining implied relationships from data obtained from three regions of Indonesia: East Java, Makassar, and Medan. Psychometric properties of the measurement model were satisfactory with all constructs meeting sufficient reliability (Cronbach's α ≥ 0.785) and convergent validity (AVE ≥ 0.700). Structural modeling explained considerable variances for government commitment (R² = 0.698) and socio-economic inclusion (R² = 0.681). Results show that socio-economic inclusion was a partial mediator of relationships between economic results and government commitment, explaining 52% of the total effect. Social innovation had stronger intrinsic effect sizes on government commitment (β = 0.387) than did socio-economic inclusion (β = 0.251). Bootstrap multigroup analyses supported the consistency of relationships among the regions and hence improved the generalizability of the model. These findings conflict with standard linear models by showing largely different reciprocal transformations of economic progress to government commitment based on inclusive development approaches. Despite being limited by inherent weaknesses of cross-sectional study limitations and slight discriminant validity, this study improves comprehension of social innovation and the effects of economic outcomes on driving factors of government commitment in developing countries. Implications of findings are such that policymakers should prioritize interventions targeting simultaneously intervene on economic results and inclusion processes for promoting sustained government engagement.