An Empirical Investigation of The Factors Influencing Village Development: A Confirmatory Factor Analysis.

Abstract

The current research uses the Confirmatory Factor Analysis and Multiple Linear Regression models to examine several factors that influence the improvement of rural development. The study was conducted in a village where is called Pahlawan Village, located in Tanjung Tiram sub-District, Batubara Regency, North Sumatra. The results of the Confirmatory Factor Test have found four factors that influence the improvement of village development. The intended factor is Government Policy, Economic Institution, Availability of Employment and the last is Community Institution. The results of multiple linear regression tests show that all variables have the positive effect on increasing rural development. The results of research findings for the t-test show that government policies and economic institutions have a positive and significant effect on improving rural development. While the availability of employment and community institutions have the positive but not significant effect on increasing rural development. The authors suggest that local and central government policies that are able to encourage the creation of employment in accordance with the potential of this region such as the fish canning industry. The role of economic institutions should be for economic empowerment, distribution of the production of fishermen and the increase in value added products.