Innovative Financing as a Mediator between Relational Engagement, Institutional Setup, and Financing Performance: Insights From Stakeholder Surveys in Indonesia’s Infrastructure Sector

This study investigates the impact of relational engagement and institutional frameworks on the financing performance of infrastructure projects in Indonesia, with a particular focus on the mediating role of innovative financing mechanisms. Data were collected via a survey of 100 key stakeholders in the infrastructure sector and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that innovative financing significantly enhances financing performance, while robust institutional frameworks positively influence both the adoption of innovative financing and overall financing outcomes. Relational engagement emerges as a crucial factor, directly improving institutional conditions, fostering innovative financing strategies, and ultimately boosting financing performance. The study also uncovers several indirect effects: for example, institutional factors improve financing performance through their positive impact on innovative financing, and relational engagement indirectly enhances financing performance by strengthening institutional frameworks that support innovative financing mechanisms. These results underscore the dynamic interplay among stakeholder relationships, formal institutional structures, and financing innovations. The research provides practical recommendations for policymakers and infrastructure developers – notably, to strengthen stakeholder collaboration and develop effective institutional environments – in order to optimize infrastructure financing strategies and project outcomes.