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One of the ideas offered is the establishment of economic institutions such as Village-Owned Enterprises (V-OE) which are supported by the role of the local government and are based on the wishes of the village community. The role of the government is needed in enhancing the culture of entrepreneurship in the managers and management of V-OE in addition to strengthening the capacity of social capital. SEM as a basis for multivariate analysis involving latent variables will be used to determine the factors affecting the business performance of V-OE. The survey through structured interviews was carried out on active V-OE involving 90 respondents from managers in Jembrana Regency of Bali. The results, are : (1) social capital and the role of government directly have a positive effect but not significant, only entrepreneurial orientation has a positive and significant effect on business performance; and (2) social capital and the role of the government in a total positive and significant effect, and require full mediation through entrepreneurial orientation to the business performance in Jembrana Regency. The results of this study are expected to be able to contribute to stakeholders in formulating rural economic development strategies through V-OE in Jembrana Regency of Bali.

Determinants of business performance of village-owned enterprises (V-OE) in Jembrana regency of Bali using SEM