Empoweringsmallindustryof woodcarvinghandicraftin Banglidistrict

Abstract Purpose – Thepurposeofthisstudyistoanalyzethein?uenceofsocialcapitalonhumancapital;theeffect of social capital on transaction costs; the in?uence of social capital, human capital and transaction costs on empowerment; the indirect effect of social capital on empowerment through human capital; and the indirect effectofsocialcapitalonempowermentthroughtransactioncostsinBangliRegency. Design/methodology/approach – The population in this research is all wood carving business in Bangli Regency, in all districts some 366 business units. The number of respondents surveyed were 191 businessunitsinallsub-districts.The samplingtechnique used is strati?ed randomsampling,with strata of business area. Inferential analysis is preceded by using factor analysis techniques to obtain factor scores on eachlatentvariable,followedbypathanalysistoanswertheresearchobjectives. Finding – Based on the analysis, the following conclusions are drawn: social capital has a positive and signi?cant impact on human resources; positive social capital and signi?cant positive to transaction costs; social capital and human resources have a positive and signi?cant effect while transaction costs and no signi?cant positive effect on empowerment; humanresources partiallymediatethein?uenceof social capital on empowerment; and transaction costs do not act as a variable, mediating the in?uence of social capital on empoweringsmallwoodcraftindustryinBangliRegency. Originality/value – Thisstudyisoneofthefewtoinvestigatetheroleofsocialcapital,humancapitaland transaction cost on empowerment of small industries, especially wood carving in Bangli District. This small woodcraftindustryisfamousforitsuniquenessthatcharacterizesBalinesecarvingornaments.Butlately,the productivity of handicrafts wood carving, especially in Bangli District, ?uctuates tend to decline. Social capital, in addition to human capital and technology, also plays an important role in the production process. Social capital equals other physical capital and can increase productivity and economic ef?ciency. Higher social capital owned by individuals or groups can reduce transaction costs; thus economic activity can run ef?ciently.Socialcapitalistheinformation,trustandnormsofreciprocityinherentinsocialnetworks. Keywords Socialcapital,Humancapital,Transactioncosts,Empowerment