Int. J Sup. Chain. Mgt Vol. 9, No. 5, October 2020 1695 Does Entrepreneurship Supply Chain Management Mediate the Effect of VOE Resources and Social Capital to Performance of Craftsmen? Ni Kadek Sinarwati 1 , AAIN Marhaeni 2 , Suryana I Made Utama 3 , Made Kembar Sri Budi 4 1 Coresponding Author, Economic Science, Economic and Business Faculty Udayana University and Accounting Department of Economic Faculty, Ganesha Education University, Singaraja Regency, Bali Province, Indonesia. 2 Economic Doctoral Program, Economic Faculty, Udayana University, Denpasar City, Bali Province, Indonesia. 3,4 Economic Faculty, Udayana University, Denpasar City, Bali Province, Indonesia. 1 nikadeksinarwati@undiksha.ac.id 2 marhaeni_agung@unud.ac.id 3 suyanautama@unud.ac.id 4 kadek_dedek@unud.ac.id Abstract— Sustainable Development Goals aims to reduce inequality, however, this problem still occurs in Bali Province. Data from its Industry showed a gap in SME performance between cities, with the lowest performance of MSE in Karangasem Regency. The objective of this research was to analyze: the effect of Village Own Enterprise (VOE) resources and social capital to entrepreneurship and performance of craftsmen. Data used were quantitative and qualitative collected through observation, and in- depth interviews, with the SEM-PLS program used for its analyzes. The results show that the effect of VOE resource is positive but insignificant to entrepreneurship of craftsmen, while social capital is positive and significant. Furthermore entrepreneurship does not mediate the effect of VOE resources on performance, while entrepreneurship mediates the effect of social capital. The suggestion of this research were to VOE management in order to more introduce the existence of VOE, subsequent researchers need to add external variable that possible influence the performance of craftsmen for example government policy. Keywords— entrepreneurship, performance, village, own, enterprise, social, capital, supply chain management 1. Introduction The reduction of inequality is one of agenda Sustainable Development Goals, however the problem until now still occur in Bali Province. Data from its Industry showed a gap in SME performance between cities, with the lowest performance of MSE in Karangasem Regency by indicator investment, production and number of employees, is the lowest between other regency/cities. Woven weaving craftsmen, woven pandanus, coconut shell processing craftsmen and wood sculpture craftsmen are part of MSE that get more attention from local government, because they produce tourism supporting product and export commodity. The government has made various efforts to overcome the problem of economic inequality to realize social justice for all of Indonesian people. President Joko Widodo’s nawacita program is to develop Indonesia from the periphery by strengthening region and village within the framework of a unitary state. Follow up of the program to develop Indonesia from the periphery by strengthening regions and villages, namely the issuance of Law 6/2014 on Villages mandating that villages can establish Village Owned Enterprises (VOE). Establishment of VOE aims as a locomotive of village-level local economic development. The local economic development of the village is based on the needs, potential, capacity of the village, and capital participation from the village government with the ultimate goal of improving the economic standard of the village community. One effort to improve the economic level of rural communities is to establish VOE. The percentage increase in the number of VOE units in Karangasem Regency over the past two years is 6.25 percent. The ratio of VOE to the number of villages is 87.18 percent. ______________________________________________________________ International Journal of Supply Chain Management IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print) Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/)