E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 126 e-ISSN 2407-392X. p-ISSN 2541-0857 Resident Perception of Conflict with Tourism Enterprise: An Investigation at A Mountainous Destination in Vietnam Duong Thi Hien1*, Tran Duc Thanh2 1 Hong Duc University, Vietnam 2 University of Social Science and Humanities, Vietnam National University, Hanoi, Vietnam *Corresponding Author: duongthihien@hdu.edu.vn DOI: https://doi.org/10.24922/eot.v9i2.92113 Article Info Submitted: June 14th 2022 Accepted: September 15th 2022 Published: September 30th 2022 Abstract Based on extended social exchange theory, the authors propose a frame- work to investigate the conflict of local residents with tourism businesses. The authors applied a random sampling method and approached 388 res- idents living in Pu Luong Nature Reserve, a renowned community based tourism destination in Thanh Hoa mountainous area, Vietnam. The find- ings show that resident’s conflict with tourism business is influenced by latent variables: community’s involvement, perceived benefit and per- ceived cost. This study is an additional contribution to the theoretical per- spective of tourism conflict. In addition, some practical implications are made for local authorities to promote sustainable tourism. Keywords: Conflict; mountainous destination; resident; stakeholder relationship; tourism enterprise. INTRODUCTION Background Tourism is an essential tool for eco- nomic development. It is a power catalyst to alter many regions to become flourish- ing lands in the world. The tangible eco- nomic benefit gained from tourism indus- try has appealed to all authorities and stim- ulated them to give priority on the develop- ment of this sector. To promote tourism, there should be the cooperation and con- sensus of all stakeholders including gov- ernment, resident, tourist, tourism enter- prise, destination development organiza- tion, etc. Among them, residents' support is a key component for sustainable develop- ment goals; especially at community based tourism destinations where the local community is considered as the center of all tourism activities and orientation (Sebele, 2010; Tosun, 2006). They are mentioned as the owners, operators, man- agers and beneficiaries of tourism activi- ties (Goodwin & Santilli, 2009). In many remote areas, despite the plentiful tourism resources; the industry of tourism is hindered by unfavorable condi- tions, such as underdeveloped infrastruc- ture, limited education capacity or lack of finance. In those cases, local authorities tend to call for investment from both locals and outsiders. The support of these units may help locations to upgrade tourism in- frastructure, connect markets and bring tourists to location, build more entertain- ment facilities and provide necessary train- ing for the local community (Goodwin & http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 127 e-ISSN 2407-392X. p-ISSN 2541-0857 Santilli, 2009). Nevertheless, the dark sides caused by tourism enterprises have been criticized at some destinations. They are biased policies, unfair benefit distribution, environmental pollution and traditional de- terioration. Tourism businesses have been criticized for the loss of local cultural value and the reduction of community cohesion, unfair benefit distribution, environmental pollution and natural landscape deteriora- tion. Those negative impacts have with- drawn resident support and led to hostile behaviors. Residents marched and pro- tested tourism business (Jinsheng & Siri- phon, 2019), burnt tourists' coach, vandal- ized tourist boats (Ebrahimi & Khalifah, 2014), closed village gate to protest tourist to enter (Wang & Yotsumoto, 2019). Those unfriendly actions not only worsen the destination image but also disrupt the development of tourism industry. They prevented resource integration, wasted re- sources, damaged tourism management at- tempts and negatively affected related ben- efits (Apostolidis & Brown, 2021; Ca- navan, 2017; Liu et al., 2017; Prior & Mar- cos-Cuevas, 2016; Yang et al., 2013); thereby, created barriers to tourism pro- jects at community (Lo & Janta, 2020; Tesfaye, 2017; Wang, 2021). Thus, one of the important issues to maintain and ensure the sustainability of a tourist destination is to identify the con- flicts arisen between the local community and tourism businesses; clarify the antecedents of conflicts and then promote a conflict management model. Effective conflict management strategies are essen- tial to avoid devaluation, encourage coop- eration and resource integration, which may support the destination to achieve Sus- tainable Development Goals of the United Nations for tourism (Apostolidis & Brown, 2021). This study will investigate the con- flict of local residents with tourism busi- nesses at Pu Luong Nature Reserve, an emerging community based tourism desti- nation in Thanh Hoa mountainous area, Vietnam. The finding is an additional con- tribution to the theoretical perspective of tourism conflict. It also offers valuable in- sights to policy-makers to propose strate- gic actions to avoid conflict and promote sustainable tourism. LITERATURE REVIEW Residents - tourism enterprises conflict The conflict between residents and tourism businesses has been mentioned in many studies. These two groups often dis- pute over some main issues: the ownership and access to public resources, unfair ben- efit distribution, polluted environment and traditional deterioration. Tourism busi- nesses have been criticized for cooperating with authorities to take over and control important resources (especially land re- sources) (Engström & Boluk, 2012; Glasson, et al., 1995; Lo & Janta, 2020; Wang & Yotsumoto, 2019; Xu et al., 2017; Xue & Kerstetter, 2018; Yang et al., 2013). Glasson et al. (1995) reported that the dom- inance of the industry by non-local inves- tors can reduce residents’ control over lo- cal resources. Engström & Boluk (2012) also revealed that the most prominent con- flict between resident and tourism com- pany during the planning process was the unfair power relationship, the residents could not raise their voice while tourism business, accompanied by local govern- ment, gained most of the advantages in the use of local resources. Xue & Kerstetter (2018) confirmed that these two parties share the same devel- opment goal, but they have contradictions in values, attitudes and theory. The authors noted that residents are frustrated with tourism businesses because the investor cooperated with the government to abuse power and take over most of local re- sources. Similarly, Lo & Janta (2020) as- serted that community-based tourism brings local residents opportunities to http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 128 e-ISSN 2407-392X. p-ISSN 2541-0857 promote economic development by utiliz- ing community’s natural as well as cultural resources; however, when tourism is devel- oped, it may create conflicts between resi- dents and investors over resource owner- ship. Residents reflected that their im- portant lands had fallen into the hands of outside developers. Many residents complained that tourism benefits mainly belong to the busi- ness while the residents receive little or get no economic benefit at all (Jinsheng & Sir- iphon, 2019; Lo & Janta, 2020; Bussaba Sitikarn, 2008). According to Jinsheng & Siriphon (2019), local residents believed that they - as the true owners of the com- munity's tourism resources, who play an important role in tourism projects - should receive a larger distribution of tourism in- come. Meanwhile, the investors insisted that the revenue from tourist tickets should be retained for the company. They ex- plained that the tourism companies must be responsible for many important actions such as scenic management and marketing promotion, renovating destination land- scape, constructing and maintaining infra- structure, paying taxes to the government; therefore, the profit must be theirs. With different points of view, these two groups had come to conflicting actions. Residents gathered around the business gate area to protest and boycott tourism businesses. Si- tikarn (2008) also mentioned that more than 70% of revenue belongs to private en- trepreneurs, which leads to frustration in community. Tourism businesses are also criti- cized for environmental pollution (Ebrahimi & Khalifah, 2014; Gascón, 2012; Jinsheng & Siriphon, 2019; Mannon & Glass-Coffin, 2019) and deteriorate nat- ural landscape (Kreiner, Shmueli, & Gal, 2015). According to Ebrahimi & Khalifah (2014), non-participants often have a jeal- ous attitude towards the neighbors who run businesses and take advantage of commu- nity’s resources to get individual economic benefits. Moreover, problems of noise, air pollution, water pollution, resource degra- dation, etc., make non-participants feel more annoyed and criticize the tourism businesses. Kreiner et al. (2015) revealed that residents felt threatened when there was interference in the construction pro- cess which disturbed and messed up natu- ral landscape. In addition, enterprises’ infringement may threaten local religious, cultural and social values. The differences in cultural values and social norms led to conflict between the two parties and even provoked negative behaviors afterward. Other studies also affirmed that the busi- ness of tourism enterprises causes the loss of local cultural value and the reduction of community cohesion (Kinseng et al., 2018; Xu et al., 2017; Xue & Kerstetter, 2018). Conflict antecedents According to SET, social interac- tions are essentially an exchange process, each individual will assess what they gain and lose. They will join in a relationship and do something when they receive bene- fits, if the cost outweighs the benefits, they tend to terminate or leave the relationship (Homans, 1961). In tourism, SET has been used by many scholars to analyze the atti- tudes and behaviors of related groups (such as: Andereck et al., 2005; Chen, 2018; Choi & Sirakaya, 2005; Gan, 2020; Ju- rowski & Gursoy, 2004; Ko & Stewart, 2002; Nunkoo et al., 2016; Rasoolimanesh et al., 2017; Sharpley, 2014). Those studies suggested that when local people realize the perceived benefits are less than the cost, they may have anti attitudes and be- haviors toward tourism development as well as specific groups who are promoting tourism development in their locality. Sitikarn (2008), Timur & Getz (2008), McCool (2009) and Mannon & Glass-Coffin, (2019) have also confirmed that the downsides of tourism are important reasons for the conflicts at destinations. McCool (2009) mentioned that the conflict http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 129 e-ISSN 2407-392X. p-ISSN 2541-0857 arises when local people realize that tour- ism development causes negative effects on their living environment, change cul- tural values. Inappropriate use or loss of re- sources is also an important cause of dis- pute and conflict in the tourism industry (Liu et al., 2017; Tao & Wall, 2009; Zhang et al., 2015). In other words, residents' per- ceptions may influence conflicts between residents and stakeholders. Therefore, fol- lowing research hypotheses were pre- sented: H1: Perceived benefits directly and nega- tively affects residents - tourism en- terprise conflict. H2: Perceived cost directly and positively affects residents - tourism enterprise conflict. According to Lee (2013) and Nugroho & Numata (2020), the original SET do not examine the mechanism on how resident perceives costs and benefits of tourism development in particular social circumstances. Therefore, they proposed an additional framework, extended SET, to clarify the mechanism of locals’ attitude and behavior. They found that residents' perceived cost and benefit may be influ- enced by other factors. An important one which has been mentioned in numerous studies is community involvement (Choi & Sirakaya, 2005; Jurowski & Gursoy, 2004; Nicholas et al., 2009; Nunkoo et al., 2016; Presenza et al., 2013; Rasoolimanesh et al., 2015; Sekhar, 2003; Sirivongs & Tsuchiya, 2012). These scholars all implied that com- munity involvement closely relates to resi- dent’s perceived benefit, perceived cost as well as resident’s atitude. If the residents are involved in tourism, they have more chances to be beneficial from tourism (Sebele, 2010). Also, if residents partici- pated in natural management, they have chance to understand and aware of natural protection. The involvement in manage- ment and decision-making may create in- centives for residents to integrate tourism into the local economy (Aas et al., 2005; Simmons, 1994). A recent study by Nugroho & Numata (2020) also revealed that the more the community members are involved in tourism, the more they support tourism development. Butler (1980), Prosser (1994) and Ceballos-Lascurain (1996) have noted that resentment, antago- nism, and alienation often arise between locals and tourism investors if the locals are not involved in the tourism business. To resolve conflicts, maximizing resident participation is a solution proposed by many researchers (Bhalla et al., 2016; Con- nor & Gyan, 2020; Curcija et al., 2019; Fan et al., 2019). Accordingly, the following hypotheses were proposed: H3. Community involvement directly and negatively associated with residents - tourism enterprise conflict. H4. Community involvement indirectly and negatively associated with resi- dents - tourism enterprise conflict through perceived benefit. H5. Community involvement indirectly and positively associated with resi- dents - tourism enterprise conflict through perceived cost. Figure 1. Research framework RESEARCH METHODS Study Site Pu Luong Nature Reserve belongs to 2 mountainous districts of Thanh Hoa province (Ba Thuoc and Quan Hoa), about170 km from Hanoi and 130 km from Thanh Hoa city. This place has favorable H2 H5 H4 Community Involvement Perceived Benefit Resident – Tourism Enterprise Conflict Perceived Cost H1 H3 http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 130 e-ISSN 2407-392X. p-ISSN 2541-0857 conditions for tourism development: un- spoiled nature, picturesque landscape, fresh atmosphere, unique and rustic life- style of ethnic minorities. With those po- tentials, Pu Luong Nature Reserve has at- tracted thousands of tourists since the early 2000s. To boost tourism economy, the lo- cal government has proposed various poli- cies to attract investors to modernize infra- structure and promote destination. Realiz- ing the investment opportunities, along with the welcome of local government, many investors (both domestic and foreign ones) have come to start up business at lo- cality. They buy potential area or rent local houses to build homestay resorts. So far, there have been hundreds of tourism enter- prises at Pu Luong nature reserve. Among them, dozens of accommodation establish- ments are owned by external investors. Research process The research process was divided into two phases. Firstly, a qualitative study was carried out to synthesize and adjust the theoretical model. Beside literature review, the in-depth interviews were conducted to develop a scale used to measure related concepts, especially the concept of conflict between residents and tourism businesses. Quantitative research will be conducted in the next step. Residents who are living in selected areas will be interviewed and asked to complete a questionnaire with main content of community involvement, perceptions of benefit and cost, stakeholder conflicts. Age, sex, education level, occu- pation and ethnic are also asked for sorting purpose. Measures The concept of community involve- ment is based on the scale developed by Lee, (2013) and Nugroho & Numata (2020) including 4 components. The con- cept of perceived benefits and perceived costs are obtained from previous research of Gursoy & Rutherford, (2004), consist of 18 variables (11 variables for measuring perceived benefits and 7 variables for measuring perceived costs). With the concept of conflict between residents and tourism businesses, the au- thors develop and modify based on 4-steps research process proposed by Churchill (1979) and Wang et al., (2007): 1. Generate items, 2. Collect data and purify measures, 3. Collect data with other populations and reanalysis the measures, 4. Confirm the scale (Figure 2). As a result, a scale of six variables has been confirmed for empirical study. Figure 2. Scale generation process Step 1. Item generation According to Churchill (1979), the first step in the procedure of scale develop- ment is to precisely specify the domain for constructs. The concept of conflict was de- fined by Thomas (1976, p.891) as “the pro- cess which begins when one party per- ceives that another has frustrated, or is about to frustrate, some concern of his”. Similarly, Wall & Callister (1995) stated: “Conflict is a process in which one party perceives that its interests are being op- posed or negatively affected by another Item generation • Specify domain for constructs • Literature review • In-depth interviews • Content analysis method Data collection (one) and purification of measures • Coefficient alpha • Exploratory factor analysis Data collection (two) and reanalysis of measures • Coefficient alpha • Confirmatory factor analysis • Construct validity Confirm the scale http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 131 e-ISSN 2407-392X. p-ISSN 2541-0857 party”. So, the feeling of disagreement, negative emotions, and interference are three aspects to specify the concept of con- flict. Based on these three components, the author lists and arranges the conflicting contents mentioned in previous studies to create a variable pool. At the same time, these aspects are used to design interiew guide for in-depth interview with stake- holders. 14 residents, 4 enterprise manag- ers and 4 local tourism management offi- cials in Pu Luong Nature Reserve were purposely approached to reveal conflicting issues between residents and tourism busi- ness. MAXQDA software was used to an- alyze in-depth interview data afterward. All residents' expressions of disagreement, negative emotions, and interference with tourism enterprises were counted as a unit of analysis which were then coded and sorted into specific variables about con- flict. From literature review, there were 45 analysis units referring to the conflict between residents and tourism businesses, these units were sorted into 7 items. How- ever, an item may be retained when at least 6 experts mentioned (Bearden et al., 1989, 2001). After screening, 2 components for the concept of conflict between residents and tourism businesses are retained. Five components were mentioned by less than 6 experts and were excluded from the list. With in-depth interview data, 80 analytical units referring to conflicts between resi- dents and businesses were obtained, sorted into 9 components. Using the principle of Bearden et al., (1989, 2001), a component is retained when 6 or more respondents mentioned, 6 components for the concept of residents - tourism enterprises conflict between were retained. Actually, all of these items had been mentioned in previ- ous studies (Table 1). Table 1. Components of residents - tourism enterprise conflict from literature review and in-depth interviews Items Source (Literature review) In-depth interview (Fre- quency) Residents receive very little eco- nomic share from tourism enter- prises (Feng & Li, 2020; Jinsheng & Siriphon, 2019; Lo & Janta, 2020; Bussaba Sitikarn, 2008) 17 Tourism enterprises changes the traditional culture of local resi- dents (Kinseng et al., 2018; Kreiner et al., 2015; McCool, 2009; Xue & Kerstetter, 2018) 16 Tourism enterprises pollute local environment (Ceballos-Lascurain, 1996; Ebrahimi & Khalifah, 2014; Gascón, 2012; Glasson et al., 1995; Jins- heng & Siriphon, 2019; Mannon & Glass-Coffin, 2019; Prosser, 1994) 9 The continuous construction of tourism enterprises disrupts the original landscape (Kreiner et al., 2015) 9 External investors have con- trolled local tourism resources and activities (Glasson et al., 1995; Jinsheng & Siriphon, 2019; Kinseng et al., 2018; Lo & Janta, 2020; Wang & Yotsumoto, 2019; Xu et al., 2017; Xue & Kerstet- ter, 2018; Yang et al., 2013) 8 Tourism business reduces cohe- sion in the community and change’s social structure in the community (Kinseng et al., 2018; Kreiner, et al., 2015; Xue & Kerstetter, 2018) 8 http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 132 e-ISSN 2407-392X. p-ISSN 2541-0857 After developing an item pool for the scales, 7 experts who are researchers and managers in tourism industry were asked to evaluate the content validity and revise the wording. They were asked to of- fer suggestion to add or delete inappropri- ate, ambiguous, and non-representative items (Hardesty & Bearden, 2004; Zaichkowsky, 1985). Every expert was asked to score items using a scale from 1 (extremely unsuitable) to 5 (extremely suitable). Any item that has a score lower than 3 would be deleted. As a result, 6 items were scored above 3 points and therefore were retained. Some components were adjusted in terms of words so that the meaning of the sentence become clearer and more coherent. Step 2. Data collection and purification of measures To verify the clarity, reliability and relevance of the scale, a pilot test was con- ducted with a small sample size. The ques- tionnaire was distributed to 150 local peo- ple in September 2021. 148 valid question- naires were collected and analyzed for re- liability (Coefficient alpha) and explora- tory factor analysis (EFA). The result showed that all factors have Cronbach's Al- pha (CA) value greater than 0.6 and were thus considered to be reasonably reliable (Bagozzi & Yi, 1988) and in conformance with the criteria for internal consistency (Hair et al., 2010). For the result of EFA, with varimax rotation, the Eigenvalues and variance were extracted to 5 (groups) of main factors with Eigenvalues > 1, the smallest Eigenvalues was 1.202. The cu- mulative percentage of explained variance was 68.347% > 50%. One item of per- ceived benefit and one item of perceived cost had factor loadings lower than 0.5 and were thus excluded. All items of commu- nity involvement and resident – tourism enterprise conflict had factor loading greater than 0.5 and then were retained (Hair et al., 2013). Step 3. Data collection (two) and reanaly- sis of measures Although the scales have been re- fined and verified to be reliable, Churchill (1979) suggested that the scales should be tested again with different samples. There- fore, a second pilot survey was conducted in November 2021. The data then was re- analyzed for CA, EFA, to ensure that the scale is valid and reliable. Moreover, con- firmatory factor analysis (CFA) was ana- lysed to check whether the theoretical model is appropriate or not. The sample size of the second pilot survey was 150. The results of analysis of CA, EFA, CFA of all scales were accepta- ble. Specifically, all scales had Cronbach's Alpha coefficient greater than 0.8. All var- iables had the total correlation coefficient greater than 0.3. The value of EFA showed that the KMO index was 0.866 > 0.5, the results of Barlett's test was 4376.816 with the Sig = 0.000 < 0.05; value of total vari- ance extracted = 71.469% > 50%; the smallest Eigenvalues of factors was 1.824>1, and were accepted. The compo- site reliability of each construct was greater than 0.7, indicating high internal con- sistency. Moreover, the factor loading of each item was greater than 0.5; the AVE of constructs was from 0.675 to 0.697 > 0.5, indicating that the scale possessed favora- ble convergent validity (Hair et al., 2013). The square root of the AVE of each con- struct was higher than the correlation coef- ficient between any two constructs, demonstrating the discriminant validity of the scale (Fornell & Larcker, 1981). All HTMT coefficients were lower than 0.9 (the highest is 0.482); thus, the scales in the structures are all discriminatory (Henseler et al., 2015). Step 4. Confirm the scale for empirical study The official scale for empirical study includes 22 items (4 items for community http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 133 e-ISSN 2407-392X. p-ISSN 2541-0857 involvement, 10 items for perceived bene- fits, 6 items for perceived cost, and 6 items for resident – tourism enterprise conflict (Table 2). Sampling and survey procedures According to Hair et al., (1998) the minimum sample is five for one variable. The total variable in the study is 22, so the minimum sample is 110. In the study, the authors randomly approached and col- lected 388 valid samples. Respondents must be 18 years old or above. Due to the low level of education in mountainous ar- eas, many locals do not know how to use the internet and email, so the author used the face to face survey method to achieve the highest efficiency (Neuman, 2014). In addition, with direct survey, the investiga- tor may explain for residents in case they have any question. A group of students ma- joring in Tourism at Hong Duc University, who are also locals, were trained to con- duct the survey. Respondents were intro- duced to the purpose of the survey, and whether they agreed to take part in the sur- vey or not. If they agree, the respondent may read the questionnaire on their own or the investigator can help. After completing the questionnaire, respondents were given a small gift. The survey was conducted in 2 months, from December 2021 to January 2022. SmartPLS 3.3.7 software was used to process and evaluate data. The research model was tested using partial least squares structural equation modeling (PLS-SEM). FINDINGS Demographic information Regarding gender, 64.9% of the re- spondents were male and 35.1% were fe- male. 36.6% were aged between 18 and 24 (gen Z), 27.7% were aged between 24-40 (gen Y), 26% were aged 41-55 (gen X), the rest were above 55. There are 4.6% of re- spondents who did not attend any training school, 14.4% had completed primary school, 37.1% had completed secondary school, 36.9% had graduated from high school, 4.6% had qualified with vocational degree and 2.8% had bachelor degree. Most of the respondents have lived in the locality for more than 20 years. Assessment of the measurement model Table 2 shows the overall values of the latent variables in the questionnaire and they are all accepted. Regarding the overall reliability, Cronbach’s alpha values for community involvement (CI), perceived benefits (PB), perceived costs (PC), and resident - tourism enterprise conflict (REC) are 0.902, 0.935, 0.905 and 0.903, respectively. Composite Reliability (CR) are all greater than 0.9>0.8 (Daskalakis & Mantas, 2008). Variance Inflation Factor (VIF) coefficients of all factors were less than 5 and are accepted (Hair et al., 2017). http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 134 e-ISSN 2407-392X. p-ISSN 2541-0857 Table 2. Measurement properties Construct/Items Factor Loading (>0.7) CA (>0.7) CR (>0.6) AVE (>0.5) VIF (<5) Community Involvement 0.902 0.932 0.773 I participate in tourism-related activities 0.861 0.749 2.444 I support research on tourism in the locality 0.891 0.793 2.816 I am involved in the planning and management of tourism in this community 0.886 0.792 2.924 I am involved in the decision-making for tour- ism development in this community 0.880 0.791 2.830 Perceived Benefit 0.910 0.925 0.552 Tourism increase employment opportunities 0.761 0.676 2.017 Tourism increase investment opportunities 0.758 0.671 4.364 Tourism provide more business for local people and small businesses 0.758 0.674 4.062 Tourism provide incentive for the preservation of local culture 0.711 0.626 1.968 Tourism provide more parks and other recrea- tional areas for locals 0.722 0.650 2.136 Tourism provide an incentive for the restoration of historical buildings 0.758 0.707 3.931 Tourism improve the standards of road and other public facilities 0.747 0.697 3.851 Tourism develop cultural activities by local resi- dents 0.737 0.677 2.004 Tourism increase cultural exchange between tourists and residents 0.732 0.669 4.536 Tourism have positive impact on cultural iden- tity community 0.745 0.687 4.479 Perceived Cost 0.891 0.918 0.650 Tourism increase in crime rate 0.758 0.659 2.033 Tourism increase in traffic congestion 0.845 0.768 2.525 Tourism increase in noise and pollution 0.762 0.682 2.036 Tourism high spending tourist negatively affect local’s living style 0.819 0.724 2.337 Tourism have negative effects on local culture 0.867 0.780 2.916 Tourism locals suffers from living in a tourism destination 0.781 0.656 2.071 Residents-Tourism Enterprises Conflict 0.874 0.905 0.613 I feel annoyed as tourism business have changed local traditional lifestyle 0.761 0.648 2.154 I feel annoyed as tourism business have reduced community cohesion 0.788 0.666 2.152 http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 135 e-ISSN 2407-392X. p-ISSN 2541-0857 Construct/Items Factor Loading (>0.7) CA (>0.7) CR (>0.6) AVE (>0.5) VIF (<5) Tourism businesses must share more economic benefit with locals 0.791 0.683 2.282 I am frustrated as external investors have con- trolled local tourism resources and activities 0.733 0.625 1.722 I am frustrated as tourism business have pol- luted local environment 0.804 0.718 2.649 Tourism businesses disrupts the original land- scape 0.819 0.719 2.272 Table 3. Discriminant validity index for latent variables (Fornell and Larcker Criterion) CI PB PC REC CI 0.879 PB 0.557 0.743 PC 0.293 0.021 0.806 REC -0.345 -0.411 0.049 0.783 Note: The bold numbers represent the square root of AVE value. Table 4. Discriminant validity index for latent variables (HTMT value) CI PB PC REC CP PB 0.607 PC 0.316 0.111 REC 0.384 0.455 0.117 The convergent validity and discri- minant validity of each latent variable were supported. Average Variance Extracted (AVE) were 0.772, 0.552, 0.650 and 0.613, respectively (Table 2), greater than 0.5 and demonstrating a high level of internal con- sistency (Chin, 1998; Hock & Ringle, 2010; Wong, 2013). The discriminant va- lidity was presented in Table 3 and Table 4. The square root of the AVE of each con- struct was higher than the correlation coef- ficient between any two constructs, indicating discriminant validity of the scale (Fornell & Larcker, 1981); the HTMT co- efficients were lower than 0.9 (Henseler et al., 2015). Structural model In order to test the hypothesis, boot- strapping technique was performed on smart PLS software. The repeat sample size was 5000 (Henseler et al., 2009). The structural relationship and its impact are presented in Table 5. http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 136 e-ISSN 2407-392X. p-ISSN 2541-0857 Table 5. Results of the structural path model Hypothesis Path Estimate T value P Values H1 PB -> REC -0.293 5.117 0.000 H2 PC -> REC 0.119 2.291 0.022 H3 CI -> REC -0.216 3.501 0.000 H4 CI -> PB -> REC -0.163 4.856 0.000 H5 CI -> PC -> REC 0.035 2.038 0.042 The inner model suggests that: The perceived benefit directly, neg- atively and significantly affects resident - tourism enterprise conflict (β = -0.293, t = 5.117 > 1.96; p value = 0.000 < 0.005). So, H1 is supported. The perceived cost directly, posi- tively and significantly affects resident - tourism enterprise conflict (β = -0.119, t = 2.291 > 1.96 and p value = 0.022 > 0.005). This means H2 is not supported. Community involvement directly, positively and significantly affects resident - tourism enterprise conflict (β = -0.216, t = 3.501 > 1.96 and p value = 0.000 < 0.005). This means H3 is supported. Community involvement indirectly, negatively, and significantly affects resi- dent - tourism enterprise conflict through perceived benefit (β = -0.163, t = 4.856 > 1.96 and p value = 0.000 < 0.005). Thus, H4 is supported. Community involvement indirectly, positively, and insignificantly affects resi- dent - tourism enterprise conflict through perceived cost (β = 0.035, t = 2.038 > 1.96 and p value = 0.042 > 0.005). Accordingly, H5 is not supported. CONCLUSION AND DISCUSSION Based on extended SET, the authors proposed a framework to analyse the ante- cedent factors of resident – tourism enter- prise conflict. Following research process suggested by Churchill (1979) and Wang et al., (2007), the study has developed a scale of conflict between residents and tourism businesses with 6 items. The study proved that the relationship between com- munity involvement, residents’ perceived benefit and perceived cost with conflict be- tween residents and tourism enterprises. The finding is the basis for following im- plication: The role of residents' perceptions Residents' perceptions of tourism benefits have a strong impact on residents – tourism enterprise conflict. The more benefits residents perceive, the less likely they are to oppose tourism businesses. Thus, to limit residents – tourism enter- prise conflict, authorities should focus on actions to increase resident perceived ben- efits about tourism industry, and help them recognize the value of each other. To do this, the two groups must learn about the other party’ interest and come up with a mutual beneficial compromise. They may also ask a third party to act as an interme- diary to find out the goals and interests of the parties, thereby to make proposals for beneficial cooperation (Rubin, 1994). Lo- cal authorities (who act as intermediaries between tourism businesses and local com- munities) are the best facilitators to con- nect the parties and help them understand each other, create consensus among groups, thereby to promote a more http://ojs.unud.ac.id/index.php/eot E-Journal of Tourism Vol.9. No.2. (2022): 126-143 http://ojs.unud.ac.id/index.php/eot 137 e-ISSN 2407-392X. p-ISSN 2541-0857 effective cooperation or to form future al- liances. Local authorities need to under- stand the needs, interests and concerns of each party, thereby building an integrated mechanism and policy that can meet the as- pirations of the stakeholders. Each locality needs to have clear, consistent regulations and require the involved parties to comply. The government, with its power in the pro- cess of planning and attracting investment, needs to bear in mind that residents’ life quality must be their top concern. Also, residents need to confer with tourism businesses on the cooperation mechanism and revenue sharing. The com- munity will preserve natural landscapes along with traditional culture, protect natu- ral environment, and create a beautiful des- tination image to attract tourists for busi- nesses. In the reciprocation, tourism busi- nesses who take advantage of local cultural values must share benefits with residents. They must help locals to preserve local cul- ture and festivals, protect historical sites and natural landscapes. In addition, enterprises must strictly comply with regulations on environmental protection, train and recruit locals with rea- sonable remuneration. Businesses should prioritize local labor to create job opportu- nities for locals and help them receive ben- efits from tourism development. The role of resident involvement Residents involvement is the deter- minant of sustainable development. Resi- dents involvement has a direct and nega- tive impact on residents - tourism enter- prises conflict. It also affects residents' per- ceptions of tourism benefits, thereby indi- rectly affects the conflict between residents and tourism businesses. Therefore, in order to reduce conflicts between these two groups, maximizing resident’s involve- ment is a very important solution. This findings supports the conclusion of various studies, eg: (Bhalla et al., 2016; Connor & Gyan, 2020; Curcija et al., 2019; Fan et al., 2019). When residents are involved in tourism (whether directly or indirectly), they have more opportunities to receive benefits, especially the economic ones (in- come, job opportunities, business start-up opportunities). This also contributes to im- prove residents’ life quality, especially in remote and mountainous areas. In short, residents and tourism enter- prises are important stakeholders at each tourism destination. 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