Community Empowerment as a Mediator Between Social Capital and Economic Independence: Evidence from Karangpatihan Village, Ponorogo Regency, Indonesia

This study examines the influence of social capital on economic autonomy in rural Indonesia, with a focus on the mediating role of community empowerment. Adopting a sequential exploratory–confirmatory mixed-methods design, we first conducted 12 focus group discussions and eight in-depth interviews to capture local perspectives, and then implemented a structured household survey involving 128 respondents in Karangpatihan Village, Ponorogo Regency. Quantitative analysis using Partial Least Squares Structural Equation Modelling (SmartPLS 4) reveals that social capital exerts a strong positive influence on community empowerment (β = 0.66, p < 0.001), which subsequently enhances economic independence (β = 0.46, p < 0.001). A direct, though weaker, pathway was also identified between social capital and income generation (β = 0.32, p < 0.001). Mediation analysis confirms that empowerment partially mediates this relationship (VAF = 0.59), highlighting empowerment as a critical mechanism through which social resources are converted into economic outcomes. Qualitative findings enrich these results, highlighting structural constraints, particularly poor feeder roads and limited market access, which hinder the full benefits of social capital. To conceptualize these dynamics, we propose a Layered Conversion Model, in which social capital functions as latent potential, community empowerment serves as the conversion mechanism, and infrastructure constitutes the payoff ceiling. This model not only extends Sen’s capability approach but also offers a replicable analytical framework for evaluating the effectiveness of Indonesia’s village fund programmes. Our findings under-score the need to integrate empowerment strategies with infrastructure investment to strengthen pathways toward sustainable rural economic independence.