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

  • Authors

    • Geovanni Garias Pradhana Management, Universitas Ciputra, Surabaya, Indonesia
    • Murpin Sembiring Management, Universitas Ciputra, Surabaya, Indonesia
    • Liliana Dewi Management, Universitas Ciputra, Surabaya, Indonesia
    • Thomas Stefanus Kaihatu Management, Universitas Ciputra, Surabaya, Indonesia
    • Halek Mu'min Management,INTI International, Nilai, Malaysia https://orcid.org/0009-0008-9388-8702
    https://doi.org/10.14419/r235r455

    Received date: July 16, 2025

    Accepted date: August 17, 2025

    Published date: August 20, 2025

  • Government commitment; social innovation; socio-economic outcomes

  • Abstract

    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.

  • References

    1. Acemoglu, D., Bimpikis, K., & Ozdaglar, A. (2011). Experimentation, patents, and innovation. American Economic Journal: Microeconomics, 3(1), 37–77. https://doi.org/10.1257/MIC.3.1.37
    2. Acemoglu, D., & Cao, D. V. (2012). Innovation by Entrants and Incumbents. SSRN Electronic Journal. https://doi.org/10.2139/SSRN.1682192
    3. Aggarwal, V. A., Posen, H. E., & Workiewicz, M. (2017). Adaptive capacity to technological change: A microfoundational approach. Strategic Management Journal, 38(6), 1212–1231. https://doi.org/10.1002/SMJ.2584
    4. Almeida, C. S. de, Miccoli, L. S., Andhini, N. F., Aranha, S., Oliveira, L. C. de, Artigo, C. E., Em, A. A. R., Em, A. A. R., Bachman, L., Chick, K., Curtis, D., Peirce, B. N., Askey, Dale., Rubin, J., Egnatoff, Dr. W. J., Uhl Chamot, A., El‐Dinary, P. B., Scott, J.; Marshall, G., Prensky, M., … Santa, U. F. De. (2016). Strategic Customer Service. In Revista Brasileira de Linguística Aplicada (Vol. 5, Issue 1). https://revistas.ufrj.br/index.php/rce/article/download/1659/1508%0Ahttp://hipatiapress.com/hpjournals/index.php/qre/article/view/1348%5Cnhttp://www.tandfonline.com/doi/abs/10.1080/09500799708666915%5Cnhttps://mckinseyonsociety.com/downloads/reports/Educa
    5. Amankwaa, G., Heeks, R., & Browne, A. L. (2024). Powershifts, organisational value, and water management: Digital transformation of Ghana’s public water utility. Utilities Policy, 87(January), 101724. https://doi.org/10.1016/j.jup.2024.101724
    6. Andrews, R. (2010). Organizational social capital, structure and performance. Hum Relat, 63(5), 583–608.
    7. Ansell, C. (2022). Co-Creation for Sustainability: SDG 17 as a Lever of Change. Emerald Open Research, 1(13). https://doi.org/10.1108/eor-13-2023-0010
    8. Aslam, A., Naveed, A., & Shabbir, G. (2021). Is it an institution, digital or social inclusion that matters for inclusive growth? A panel data analysis. Quality & Quantity, 55(1), 333–355. https://doi.org/10.1007/s11135-020-01008-3
    9. Bardhan, P., & Mookherjee, D. (1997). DECENTRALISATION AND ACCOUNTABILITY IN INFRASTRUCTURE DELIVERY IN DE-VELOPING COUNTRIES*. World Development Reports.
    10. Bentler, P. M. (1990). Comparative fit indexes in structural models. Psychological Bulletin, 107(2), 238–246. https://doi.org/10.1037/0033-2909.107.2.238
    11. Bhasin, S. (2012). An appropriate change strategy for lean success. Management Decision, 50(3), 439–458. https://doi.org/10.1108/00251741211216223
    12. Bhasin, S., & Burcher, P. (2006). Lean viewed as a philosophy. Journal of Manufacturing Technology Management, 17(1), 56–72. https://doi.org/10.1108/17410380610639506
    13. Brewer, G. D. (1973). On innovation, social change, and reality. Technological Forecasting and Social Change, 5(1), 19–24. https://doi.org/10.1016/0040-1625(73)90016-4
    14. Burchardt, T., Le Grand, J., & Piachaud, J. (2002). Degrees of exclusion: Developing a dynamic, multidimensional. J. Hills, J. Le Grand, & D. Pichaud, Understanding Social Exclusion, 30–43.
    15. Cajaiba-Santana, G. (2014). Social innovation: Moving the field forward. A conceptual framework. Technological Forecasting and Social Change, 82(1), 42–51. https://doi.org/10.1016/J.TECHFORE.2013.05.008
    16. Cheah, J. H., Nitzl, C., Roldán, J. L., Cepeda-Carrion, G., & Gudergan, S. P. (2021). A Primer on the Conditional Mediation Analysis in PLS-SEM. Data Base for Advances in Information Systems, 52(SI), 43–100. https://doi.org/10.1145/3505639.3505645
    17. Chin, T., Tsai, S. B., Fang, K., Zhu, W., Yang, D., Liu, R., & Tsuei, R. T. C. (2016). EO-performance relationships in reverse internationalization by Chinese global startup OEMs: Social networks and strategic flexibility. PLoS ONE, 11(9). https://doi.org/10.1371/JOURNAL.PONE.0162175
    18. Cohen, A. D. (2023). In conversation with Andrew D. Cohen. System, 118(September), 103153. https://doi.org/10.1016/j.system.2023.103153
    19. Cortese, D., Civera, C., Casalegno, C., & Zardini, A. (2024). Transformative social innovation in developing and emerging ecosystems: a configura-tional examination. Review of Managerial Science, 18(3), 827–857. https://doi.org/10.1007/S11846-023-00624-1/TABLES/5
    20. Cuntz, A., Foray, D., & Mostovova, E. (2020). On the economics of social innovation–a conceptual framework and its policy implications. Innova-tion, 22(4), 469–487. https://doi.org/10.1080/14479338.2020.1735394
    21. Del-Aguila-Arcentales, S., Alvarez-Risco, A., Jaramillo-Arévalo, M., De-la-Cruz-Diaz, M., & Anderson-Seminario, M. D. (2022). Influence of So-cial, Environmental and Economic Sustainable Development Goals (SDGs) over Continuation of Entrepreneurship and Competitiveness. In Journal of Open Innovation: Technology, Market, and Complexity (Vol. 8, Issue 2). https://doi.org/10.3390/joitmc8020073
    22. Dijkstra, T. K., & Henseler, J. (2015). Consistent partial least squares path modeling. 39(2), 297–316. https://doi.org/10.25300/MISQ/2015/39.2.02
    23. Drucker, P. F. (1987). Social innovation-Management’s new dimension. Long Range Planning, 20(6), 29–34. https://doi.org/10.1016/0024-6301(87)90129-4
    24. Fagerberg, J., Fosaas, M., & Sapprasert, K. (2012). Innovation: Exploring the knowledge base. Research Policy, 41(7), 1132–1153. https://doi.org/10.1016/J.RESPOL.2012.03.008
    25. Fornell, C. (1992). A National Customer Satisfaction Barometer: The Swedish Experience. Journal of Marketing, 56(1), 6. https://doi.org/10.2307/1252129
    26. Fornell, C., & Larcker, D. (1994). Structural equation models with unobservable variables and measurement error: Algebra and statistics. Journal of marketing research‏. Advances Methods of Marketing Research, 18(3), 382-388.
    27. Fornell, C., & Larcker, D. F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of Mar-keting Research, 18(1).
    28. Franke, G., & Sarstedt, M. (2019). Heuristics versus statistics in discriminant validity testing: a comparison of four procedures. Internet Research, 29(3), 430–447. https://doi.org/10.1108/INTR-12-2017-0515
    29. Gershuny, J. I. (1982). Social innovation. Change in the mode of provision of services. Futures, 14(6), 496–516. https://doi.org/10.1016/0016-3287(82)90035-0
    30. Gómez Zermeño, M. G., & Alemán de la Garza, L. Y. (2020). Open laboratories for social innovation: a strategy for research and innovation in ed-ucation for peace and sustainable developmentSustainable development is an issue of high relevance for all countries, and universities play a fun-damental role in promotin. Int J Sustain High Educ, 22(2), 344–362. https://doi.org/10.1108/ijshe-05-2020-0186
    31. Goyal, S., Esposito, M., & Kapoor, A. (2018). Circular economy business models in developing economies: Lessons from India on reduce, recycle, and reuse paradigms. Thunderbird International Business Review, 60(5), 729–740. https://doi.org/10.1002/TIE.21883
    32. Grozev, V. H., & Easterbrook, M. J. (2024). Can Social Identities Improve Working Students’ Academic and Social Outcomes? Lessons from Three Studies. In Education Sciences (Vol. 14, Issue 9). https://doi.org/10.3390/educsci14090939
    33. Hair, J., Anderson, R., Tatham, R., Black, W., Hair J, R, A., Babin B, Black W, Hair, J., Black, W., Babin, B., & Anderson, R. (2014). Multivariate Data Analysis.pdf. In Australia : Cengage: Vol. 7 edition (p. 758).
    34. Hair, J. F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109(December 2019), 101–110. https://doi.org/10.1016/j.jbusres.2019.11.069
    35. Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139–152. https://doi.org/10.2753/MTP1069-6679190202
    36. Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Partial Least Squares Structural Equation Modeling: Rigorous Applications, Better Results and Higher Acceptance. Long Range Planning, 46(1–2), 1–12. https://doi.org/10.1016/j.lrp.2013.01.001
    37. Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
    38. Hair, J. F., & Sarstedt, M. (2019). Factors versus Composites: Guidelines for Choosing the Right Structural Equation Modeling Method. Project Management Journal, 50(6), 619–624. https://doi.org/10.1177/8756972819882132
    39. Hair, J. F., Sarstedt, M., Matthews, L. M., & Ringle, C. M. (2016). Identifying and treating unobserved heterogeneity with FIMIX-PLS: part I – method. European Business Review, 28(1), 63–76. https://doi.org/10.1108/EBR-09-2015-0094
    40. Heeks, R., Foster, C., & Nugroho, Y. (2014). New models of inclusive innovation for development Land Evaluation View project INTRODUC-TION New models of inclusive innovation for development. https://doi.org/10.1080/2157930X.2014.928982
    41. Henseler, J. (2017). Partial least squares path modeling. Advanced Methods for Modeling Markets, 361–381.
    42. Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation model-ing. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/S11747-014-0403-8
    43. Henseler, J., & Sarstedt, M. (2013). Goodness-of-fit indices for partial least squares path modeling. Computational Statistics, 28(2), 565–580. https://doi.org/10.1007/s00180-012-0317-1
    44. Hu, L. T., & Bentler, P. M. (1998). Fit Indices in Covariance Structure Modeling: Sensitivity to Underparameterized Model Misspecification. Psy-chological Methods, 3(4), 424–453. https://doi.org/10.1037/1082-989X.3.4.424
    45. Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. 6(1), 1–55. https://doi.org/10.1080/10705519909540118
    46. Huong, P. T., Cherian, J., Hien, N. T., Sial, M. S., Samad, S., & Tuan, B. A. (2021). Environmental Management, Green Innovation, and Social–Open Innovation. In Journal of Open Innovation: Technology, Market, and Complexity (Vol. 7, Issue 1). https://doi.org/10.3390/joitmc7010089
    47. Ifield, J. D., & Yang, C.-H. (2022). Arranged Marriages in Multilateral Partnerships—Investigating Sustainable Human Development Financing of Belize in the World Bank Group: A Brand Relationship Theory Approach. In Journal of Open Innovation: Technology, Market, and Complexity (Vol. 8, Issue 4). https://doi.org/10.3390/joitmc8040197
    48. J Cohen, P. C. S. W. L. A. (1983). Applied multiple regression. Correl Anal Behav Sci, 2, 255–300.
    49. Jehoel-Gijsbers, G., & Vrooman, C. (2007). Explaining social exclusion: A theoretical model tested in the Netherlands. SCP.
    50. Kang, N., Nemani, A., & Raman, K. (2024). Social capital and supply chain relationships. Financial Review. https://doi.org/10.1111/FIRE.12394
    51. Kealy, C., McCauley, V., & Flynn, P. (2024). Socio-Economically Disadvantaged Male Students’ Hesitancy to Study Biology in Ireland: Factors Effecting Intent in the Transition to Upper Secondary School. In Education Sciences (Vol. 14, Issue 4). https://doi.org/10.3390/educsci14040341
    52. Kline, B. (2011). The Bayesian and frequentist approaches to testing a one-sided hypothesis about a multivariate mean. Journal of Statistical Plan-ning and Inference, 141(9), 3131–3141. https://doi.org/10.1016/J.JSPI.2011.03.034
    53. Kline, R. B. (1999). Nunnally, jc, & bernstein, ih (1994). Psychometric Theory. Journal of Psychoeducational Assessment, 17, 275–280.
    54. Lasarov, W., Orth, U. R., Wirtz, J., & Holm, M. (2023). Exploring the nonlinear influence of nonverbal dominance in marketing communicators: Instrumental outcomes, social outcomes, and persuasion. Journal of Business Research, 168. https://doi.org/10.1016/j.jbusres.2023.114201
    55. Leitão, J., & Capucho, J. (2021). Institutional, Economic, and Socio-Economic Determinants of the Entrepreneurial Activity of Nations. In Admin-istrative Sciences (Vol. 11, Issue 1). https://doi.org/10.3390/admsci11010026
    56. Martínez-Córdoba, P. J., Amor-Esteban, V., Benito, B., & García-Sánchez, I. M. (2021). The commitment of spanish local governments to sustaina-ble development goal 11 from a multivariate perspective. Sustainability (Switzerland), 13(3), 1–15. https://doi.org/10.3390/SU13031222
    57. Mazzucato, M., Kattel, R., & Ryan-Collins, J. (2020). Challenge-Driven Innovation Policy: Towards a New Policy Toolkit. Journal of Industry, Competition and Trade, 20, 421–437. https://doi.org/10.1007/s10842-019-00329-w
    58. Mehari, A. T., Alemu, D. K., & Yilma, S. S. (2021). Datasets of socio-economic, demographic, entrepreneurship, and financial inclusion indicators of selected sites in Ethiopia: Addis Ababa, Dire Dawa, Shirka zone. Data in Brief, 34, 106665. https://doi.org/10.1016/J.DIB.2020.106665
    59. Millard, J., & Fucci, V. (2023). The role of social innovation in tackling global poverty and vulnerability. Frontiers in Sociology, 8, 966918. https://doi.org/10.3389/fsoc.2023.966918
    60. Moulaert, F., MacCallum, D., Mehmood, A., & Hamdouch, A. (2013). The International Handbook on Social Innovation: Collective Action, Social Learning and Transdisciplinary Research. Edward Elgar.
    61. Mowday, R. T., Steers, R. M., & Porter, L. W. (1979). The measurement of organizational commitment. Journal of Vocational Behavior, 14(2), 224–247. https://doi.org/10.1016/0001-8791(79)90072-1
    62. Murray, R., Caulier, J., & Mulgan, G. (2010). The open book of Social Innovation. The Young Foundation.
    63. Nawrocki, T. L., & Jonek-Kowalska, I. (2023). Innovativeness in energy companies in developing economies: Determinants, evaluation and com-parative analysis using the example of Poland. Journal of Open Innovation: Technology, Market, and Complexity, 9(1). https://doi.org/10.1016/j.joitmc.2023.100030
    64. ]Nightingale, P. (1998). A cognitive model of innovation. Research Policy, 27(7), 689–709. https://doi.org/10.1016/S0048-7333(98)00078-X
    65. Nunnally, J., & Bernstein, I. (1994). Psychometric theory (McGraw-Hill series in psychology). McGraw-Hill.
    66. Ostrom, E. (1992). Governing the Commons: The Evolution of Institutions for Governing the Commons: The Evolution of Institutions for Collec-tive Action Collective Action. 32. https://digitalrepository.unm.edu/nrj/vol32/iss2/6
    67. Peacock, S., Konrad, S., Watson, E., Nickel, D., & Muhajarine, N. (2013). Effectiveness of home visiting programs on child outcomes: a systematic review. BMC Public Health, 13(1), 17.
    68. Pel, B., Wittmayer, J., Dorland, J., & Søgaard Jørgensen, M. (2020). Unpacking the social innovation ecosystem: an empirically grounded typology of empowering network constellations. Innovation: The European Journal of Social Science Research, 33(3), 311–336. https://doi.org/10.1080/13511610.2019.1705147
    69. Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common Method Biases in Behavioral Research: A Critical Review of the Literature and Recommended Remedies. Journal of Applied Psychology, 88(5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879
    70. Reagans, R., & McEvily, B. (2003). Network Structure and Knowledge Transfer: The Effects of Cohesion and Range. Administrative Science Quarterly, 48(2). https://doi.org/10.2307/3556658
    71. ]Reinartz, W., Haenlein, M., & Henseler, J. (2009). An empirical comparison of the efficacy of covariance-based and variance-based SEM. Interna-tional Journal of Research in Marketing, 26(4), 332–344. https://doi.org/10.1016/j.ijresmar.2009.08.001
    72. Richter, N., & Zacharias, N. A. (2024). Planting the Seeds of Innovation: Established Companies’ Startup Cooperation Capability, Its Mechanisms, and Innovation Outcomes. R and D Management. https://doi.org/10.1111/RADM.12732
    73. Sankowska, A. (2013). Relationships between organizational trust, knowledge transfer, knowledge creation, and firm’s innovativeness. Learning Organization, 20(1), 85–100. https://doi.org/10.1108/09696471311288546
    74. Sanzo, M. J., Álvarez, L. I., Rey, M., & García, N. (2012). Perceptions of top management commitment to innovation and R&D-marketing relation-ship effectiveness: Do they affect CSR? Annals of Public and Cooperative Economics, 83(3), 383–405. https://doi.org/10.1111/J.1467-8292.2012.00468.X
    75. Sarstedt, M. (2008). A review of recent approaches for capturing heterogeneity in partial least squares path modelling. Journal of Modelling in Management, 3(2), 140–161. https://doi.org/10.1108/17465660810890126
    76. Schuberth, F., Henseler, J., & Dijkstra, T. K. (2018). Partial least squares path modeling using ordinal categorical indicators. Quality and Quantity, 52(1), 9–35. https://doi.org/10.1007/S11135-016-0401-7
    77. Sen, A. (1999). Development as Freedom Oxford University Press Shaw TM & Heard. The Politics of Africa: Dependence and Development.
    78. Shmueli, G., Sarstedt, M., Hair, J. F., Cheah, J. H., Ting, H., Vaithilingam, S., & Ringle, C. M. (2019). Predictive model assessment in PLS-SEM: guidelines for using PLSpredict. European Journal of Marketing, 53(11), 2322–2347. https://doi.org/10.1108/EJM-02-2019-0189
    79. Tabash, M. I., Elsantil, Y., Hamadi, A., & Drachal, K. (2024). Globalization and Income Inequality in Developing Economies: A Comprehensive Analysis. In Economies (Vol. 12, Issue 1). https://doi.org/10.3390/economies12010023
    80. Tao, S., Pang, X., Qiu, Y., Xu, Q., & Xue, P. (2024). Green innovation in megaprojects: A capacity-based analysis of the Shenzhong Link Project in China. Project Leadership and Society, 5. https://doi.org/10.1016/J.PLAS.2024.100144
    81. The World Bank In Indonesia. (2023). Indonesia Overview: Development news, research, data | World Bank. https://www.worldbank.org/en/country/indonesia/overview
    82. Uche, E., Ngepah, N., Das, N., & Dey, L. (2024). Dynamic interactions of green innovations, green transitions and ecological load capacity factor in BRICS. Renewable Energy, 231. https://doi.org/10.1016/J.RENENE.2024.120905
    83. Vyas, S., & Kumaranayake, L. (2006). Constructing socio-economic status indices: how to use principal components analysis. Health Policy and Planning, 21(6), 459–468. https://doi.org/10.1093/HEAPOL/CZL029
    84. Wangel, J. (2011). Exploring social structures and agency in backcasting studies for sustainable development. Technological Forecasting and Social Change, 78(5), 872–882. https://doi.org/10.1016/j.techfore.2011.03.007
    85. Westley, F., & Antadze, N. (2010). Making a difference: Strategies for scaling Social Innovation for greater impact. The Public Sector Innovation Journal, 15(2).
    86. Wilson, W. J. (2022). The truly disadvantaged: The inner city, the underclass, and public policy. University of Chicago press.
    87. WIPO. (2022). Global InnovationIndex2022-15Th-Edition. 1–262.
    88. World Bank. (2021). Investing in data and innovation ecosystem to transform Indonesia’s agriculture. https://blogs.worldbank.org/en/eastasiapacific/investing-data-and-innovation-ecosystem-transform-indonesias-agriculture
    89. World Bank. (2023). Social Inclusion. https://www.worldbank.org/en/topic/social-inclusion
    90. Zamarreño-Aramendia, G., Cristòfol, F. J., de-San-Eugenio-Vela, J., & Ginesta, X. (2020). Social-Media Analysis for Disaster Prevention: Forest Fire in Artenara and Valleseco, Canary Islands. In Journal of Open Innovation: Technology, Market, and Complexity (Vol. 6, Issue 4). https://doi.org/10.3390/joitmc6040169
    91. Zhou, M., Wang, Y., Jiang, H., Li, M., & Li, G. (2023). How Leadership Influences Open Government Data (OGD)-Driven Innovation: The Medi-ating Role of Organizational Commitment. Sustainability (Switzerland), 15(2). https://doi.org/10.3390/SU15021219

  • Downloads

  • How to Cite

    Pradhana, G. G. ., Sembiring, M. ., Dewi, L. ., Kaihatu, T. S. ., & Mu'min, H. . (2025). Social Innovation as A Transmission Mechanism: How Government Commitment Translates Into Socio-Economic Development In Emerging Markets. International Journal of Accounting and Economics Studies, 12(4), 515-525. https://doi.org/10.14419/r235r455