From capital to welfare: Exploring how good governance mediates the impact of intellectual and social capital in border communities

https://doi.org/10.35912/ahrmr.v5i3.3116
Published: Sep 26, 2025

Abstract:

Purpose: This study aims to determine the role of effective governance as a mediating variable in the relationship between intellectual capital and social capital to improve community welfare in border villages, especially in Belu Regency, Indonesia.

Methodology: This study uses a quantitative approach and Partial Least Squares (PLS) analysis method. Data from 155 families in border areas was collected with a survey from 28 border villages in Belu Regency that have distinctive socio-cultural characteristics.

Results: Effective governance has been proven to mediate the relationship between intellectual capital and community welfare. Meanwhile, in the relationship between social capital and welfare, partial mediation was found. The distribution of well-managed village funds improves welfare, even with limited intellectual capital.

Conclusions: Good governance encourages the compliance of village fund managers with the rules. Strong social capital and local customs-based also strengthen the impact of fund management on welfare.

Limitations: The findings are contextual in certain villages in Belu, so they cannot be generalized. This research emphasizes the importance of strengthening governance and integrating traditional values in village resource management.

Contribution: This research contributes to the literature by integrating intellectual capital, social capital, and governance into a single framework, highlighting how governance mediates development outcomes in marginalized border communities.

Keywords:
1. Belu Regency
2. Community Welfare
3. Good Governance
4. Intellectual Capital
5. Social Capital
Authors:
1 . I Komang Arthana
University of Nusa Cendana, Kupang, Nusa Tenggara Timur, Indonesia
2 . Ni Putu Nursiani
University of Nusa Cendana, Kupang, Nusa Tenggara Timur, Indonesia
3 . Yonas Ferdinand Riwu
University of Nusa Cendana, Kupang, Nusa Tenggara Timur, Indonesia
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How to Cite
Arthana, I. K., Nursiani , N. P., & Riwu, Y. F. (2025). From capital to welfare: Exploring how good governance mediates the impact of intellectual and social capital in border communities. Annals of Human Resource Management Research, 5(3), 801–816. https://doi.org/10.35912/ahrmr.v5i3.3116
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Vol. 5 No. 3 (2025): September
Articles
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References

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    Baihaqi, Asmawanti-S, D., & Putradana, M. R. (2023). The Village Financial Management Through Accountability, Transparency and Community Participation. Perspektif Akuntansi, 6(1), 15-36. doi:https://doi.org/10.24246/persi.v6i1.p15-36

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    Casallas, D. F. R. (2020). Strikes, Institutional Crisis in Latin America and Democratic Governance. Justicia, 25(37), 151-166. doi:https://doi.org/10.17081/just.25.37.4367

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    Mukaro, C. T., Deka, A., & Rukani, S. (2023). The Influence of Intellectual Capital on Organizational Performance. Future Business Journal, 9(1), 1-14. doi:https://doi.org/10.1186/s43093-023-00208-1

    Nugrahani, T. S., Suharni, S., & Saptatiningsih, R. I. (2019). Potential of Social Capital and Community Participation in Village Development. JEJAK: Jurnal Ekonomi dan Kebijakan, 12(1), 68-85. doi:https://doi.org/10.15294/jejak.v12i1.15775

    Nurcahyono, Sinarasri, A., Pamungkas, I. D., & Hanum, A. N. (2025). May Intellectual Capital and Corporate Governance Reduce the Probability of Financial Distress?. Contaduria y Administracion, 70(1), 1-25. doi:https://doi.org/10.22201/fca.24488410e.2025.5169

    Omerzel, D. G., & Jurdana, D. S. (2016). The Influence of Intellectual Capital on Innovativeness and Growth in Tourism SMEs: Empirical Evidence from Slovenia and Croatia. Economic Research-Ekonomska Istraživanja, 29(1), 1075-1090. doi:https://doi.org/10.1080/1331677X.2016.1211946

    Putu, N., Ernawatiningsih, L., Agung, A., Marhaeni, I., & Yuliarmi, N. (2023). Improving Farmers’ Welfare by Enhancing the Ability of Information Technology Adoption. Journal of the Community Development in Asia, 6(1), 100-109. doi:https://doi.org/10.32535/jcda.v6i1.2067

    Revida, E., Ismail, R., Lumbanraja, P., Trimurni, F., Sembiring, S. A. B., & Purba, S. (2023). Village Owned Enterprises Governance (BUMDes) Based on the Tourism Village Development. International Journal of Sustainable Development and Planning, 18(10), 3341-3346. doi:https://doi.org/10.18280/ijsdp.181034

    Saparita, R., Hidajat, E. W., & Apriliyadi, E. K. (2019). Pengembangan Ekonomi Desa Penghasil Kopi Melalui Pemanfaatan Ilmu Pengetahuan dan Teknologi di Kabupaten Belu. Riau Journal of Empowerment, 2(2), 81-91. doi:https://doi.org/10.31258/raje.2.2.81-91

    Tarighi, H., Salehi, M., Moradi, M., & Zimon, G. (2022). Social Capital, Intellectual Capital, and Audit Fee: Conflicting Evidence from Iran. Economies, 10(2), 1-42. doi:https://doi.org/10.3390/economies10020039

    Tarlani, Dariah, A. R., & Rani, A. M. (2022). Transforming Rural Economy Through Community-Based Tourism with Village-Owned Enterprise (BUMDES, Badan Usaha Milik Desa)-A Case Study: Cibiru Wetan, Pagerwangi and Cipamekar Villages, Indonesia. International Journal of Sustainable Development & Planning, 17(5), 1-8. doi:https://doi.org/10.18280/ijsdp.170517

    Taylor-Gooby, P. (2008). Reframing Social Citizenship. New York: Oxford University Press.

    Tejada, J. J., & Punzalan, J. R. B. (2012). On the Misuse of Slovin’s Formula. The philippine statistician, 61(1), 129-136.

    Tsai, C.-H., & Mutuc, E. B. (2020). Evidence in Asian Food Industry: Intellectual Capital, Corporate Financial Performance, and Corporate Social Responsibility. International Journal of Environmental Research and Public Health, 17(2), 1-21. doi:https://doi.org/10.3390/ijerph17020663

    Wold, S., Sjöström, M., & Eriksson, L. (2001). PLS-Regression: A Basic Tool of Chemometrics. Chemometrics and Intelligent Laboratory Systems, 58(2), 109-130. doi:https://doi.org/10.1016/S0169-7439(01)00155-1

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  5. Azheri, B., & Anggunsuri, U. (2018). The Anomaly of the Village Government in Establishing Village Owned Enterprise. Hasanuddin Law Review, 4(2), 256-264. doi:https://doi.org/10.20956/halrev.v4i2.1299
  6. Baihaqi, Asmawanti-S, D., & Putradana, M. R. (2023). The Village Financial Management Through Accountability, Transparency and Community Participation. Perspektif Akuntansi, 6(1), 15-36. doi:https://doi.org/10.24246/persi.v6i1.p15-36
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  26. Putu, N., Ernawatiningsih, L., Agung, A., Marhaeni, I., & Yuliarmi, N. (2023). Improving Farmers’ Welfare by Enhancing the Ability of Information Technology Adoption. Journal of the Community Development in Asia, 6(1), 100-109. doi:https://doi.org/10.32535/jcda.v6i1.2067
  27. Revida, E., Ismail, R., Lumbanraja, P., Trimurni, F., Sembiring, S. A. B., & Purba, S. (2023). Village Owned Enterprises Governance (BUMDes) Based on the Tourism Village Development. International Journal of Sustainable Development and Planning, 18(10), 3341-3346. doi:https://doi.org/10.18280/ijsdp.181034
  28. Saparita, R., Hidajat, E. W., & Apriliyadi, E. K. (2019). Pengembangan Ekonomi Desa Penghasil Kopi Melalui Pemanfaatan Ilmu Pengetahuan dan Teknologi di Kabupaten Belu. Riau Journal of Empowerment, 2(2), 81-91. doi:https://doi.org/10.31258/raje.2.2.81-91
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  30. Tarlani, Dariah, A. R., & Rani, A. M. (2022). Transforming Rural Economy Through Community-Based Tourism with Village-Owned Enterprise (BUMDES, Badan Usaha Milik Desa)-A Case Study: Cibiru Wetan, Pagerwangi and Cipamekar Villages, Indonesia. International Journal of Sustainable Development & Planning, 17(5), 1-8. doi:https://doi.org/10.18280/ijsdp.170517
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  33. Tsai, C.-H., & Mutuc, E. B. (2020). Evidence in Asian Food Industry: Intellectual Capital, Corporate Financial Performance, and Corporate Social Responsibility. International Journal of Environmental Research and Public Health, 17(2), 1-21. doi:https://doi.org/10.3390/ijerph17020663
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  35. Zakrzewska, M., Ahn, M., Biglieri, J., Zascerinska, J., & Gruenwald, N. (2017). The Role of Social Participation in the Concept of Good Governance-A Theoretical Approach. Public Policy and Administration, 16(4), 529-537. doi:http://dx.doi.org/10.13165/VPA-17-16-4-01