Effect of the Moderation of Economic Institution on Local Economic Development

Local economic development is a process in which local governments and community organizations are involved to encourage, stimulate, maintain, business activities to create jobs through increasing human resource capacity to create better products and fostering industry and business activities on a local scale. This study aims to find the appropriate concept approach in overcoming the problem. The Local Economic Independence approach was used in building this model by using 167 coconut farmer respondents, and path analysis was used as a data analysis tool. Research finding showed that 1) together and partially the local economic development variables ; human resource development, capital development, market development, development of economic institutions, simultaneously and partially have a significant effect on Local Economic Development; 2) Direct development of economic institutions has effect on Local Economic Development; 3) development of economic institutions have interactive effect on Local Economic Development of coconut farmer in the Sri Tiga village of Banyuasin district. The results of the study show that partially the variables of human resource development, capital development, market and social development have a significant effect on the development of community economic institutions. It is necessary to pay attention to 5 (five) factors, including: human resource factors, factors of capital, marketing factors, social (cultural) factors, as well as factors of community economic institution development. As for some factors that still have problems developing the business of coconut farmers in managing coconut waste in the village of Sri Tiga, among others, marketing factors, capital factors, and human resource factors. Keywords—local economic development; local economic independence