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Government financial support and financial performance of SMEs: a dual sequential mediator approach

Government financial support (GFS) is an important factor for firms in developing countries, particularly small and medium enterprises (SMEs), to be competitive and perform better. Nonetheless, studies on the relationship between GFS and firm performance have yielded inconclusive results. Researcher...

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Main Authors: Jayeola, Olakunle, Sidek, Shafie, Sanyal, Shouvik, Hasan, Syed Inamul, An, Nguyen Binh, Mofoluwa Ajibade, Samuel-Soma, Phan, Thi Thu Hien
Format: Article
Published: Elsevier BV 2022
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spelling oai:psasir.upm.edu.my:101646 http://psasir.upm.edu.my/id/eprint/101646/ Government financial support and financial performance of SMEs: a dual sequential mediator approach Jayeola, Olakunle Sidek, Shafie Sanyal, Shouvik Hasan, Syed Inamul An, Nguyen Binh Mofoluwa Ajibade, Samuel-Soma Phan, Thi Thu Hien Government financial support (GFS) is an important factor for firms in developing countries, particularly small and medium enterprises (SMEs), to be competitive and perform better. Nonetheless, studies on the relationship between GFS and firm performance have yielded inconclusive results. Researchers' efforts to resolve the inconclusiveness led to an examination of competitive advantage (CA) as a simple mediator. This study contends that CA should not be the first mediator but rather a resource acquired with GFS, such as cloud ERP, which has CA-enabled qualities, as opposed to GFS, which lacks the ability to offer CA to firms. Hence, using 204 Malaysian manufacturing SMEs as a sample, this study investigates the dual sequential mediation of cloud ERP implementation (CERPI) and CA in the GFS-financial performance (FPER) relationship. PLS-SEM was employed as a data analysis method and for hypotheses assessment. Findings reveal that the GFS is not directly associated with FPER. However, GFS is positively related to CERPI, which subsequently enhances CA positively. CA is also positively associated with FPER, and CERPI and CA sequentially mediate the GFS and FPER relationship positively. This study makes a contribution to the literature by providing a more holistic understanding of the complex relationship between GFS and FPER. This study could assist SMEs and policymakers in gaining a better understanding of the process and requirements for realising valuable benefits from GFS. Elsevier BV 2022 Article PeerReviewed Jayeola, Olakunle and Sidek, Shafie and Sanyal, Shouvik and Hasan, Syed Inamul and An, Nguyen Binh and Mofoluwa Ajibade, Samuel-Soma and Phan, Thi Thu Hien (2022) Government financial support and financial performance of SMEs: a dual sequential mediator approach. Heliyon, 8 (11). pp. 1-11. ISSN 2405-8440 https://www.sciencedirect.com/science/article/pii/S2405844022026391 10.1016/j.heliyon.2022.e11351
institution UPM IR
collection UPM IR
description Government financial support (GFS) is an important factor for firms in developing countries, particularly small and medium enterprises (SMEs), to be competitive and perform better. Nonetheless, studies on the relationship between GFS and firm performance have yielded inconclusive results. Researchers' efforts to resolve the inconclusiveness led to an examination of competitive advantage (CA) as a simple mediator. This study contends that CA should not be the first mediator but rather a resource acquired with GFS, such as cloud ERP, which has CA-enabled qualities, as opposed to GFS, which lacks the ability to offer CA to firms. Hence, using 204 Malaysian manufacturing SMEs as a sample, this study investigates the dual sequential mediation of cloud ERP implementation (CERPI) and CA in the GFS-financial performance (FPER) relationship. PLS-SEM was employed as a data analysis method and for hypotheses assessment. Findings reveal that the GFS is not directly associated with FPER. However, GFS is positively related to CERPI, which subsequently enhances CA positively. CA is also positively associated with FPER, and CERPI and CA sequentially mediate the GFS and FPER relationship positively. This study makes a contribution to the literature by providing a more holistic understanding of the complex relationship between GFS and FPER. This study could assist SMEs and policymakers in gaining a better understanding of the process and requirements for realising valuable benefits from GFS.
format Article
author Jayeola, Olakunle
Sidek, Shafie
Sanyal, Shouvik
Hasan, Syed Inamul
An, Nguyen Binh
Mofoluwa Ajibade, Samuel-Soma
Phan, Thi Thu Hien
spellingShingle Jayeola, Olakunle
Sidek, Shafie
Sanyal, Shouvik
Hasan, Syed Inamul
An, Nguyen Binh
Mofoluwa Ajibade, Samuel-Soma
Phan, Thi Thu Hien
Government financial support and financial performance of SMEs: a dual sequential mediator approach
author_facet Jayeola, Olakunle
Sidek, Shafie
Sanyal, Shouvik
Hasan, Syed Inamul
An, Nguyen Binh
Mofoluwa Ajibade, Samuel-Soma
Phan, Thi Thu Hien
author_sort Jayeola, Olakunle
title Government financial support and financial performance of SMEs: a dual sequential mediator approach
title_short Government financial support and financial performance of SMEs: a dual sequential mediator approach
title_full Government financial support and financial performance of SMEs: a dual sequential mediator approach
title_fullStr Government financial support and financial performance of SMEs: a dual sequential mediator approach
title_full_unstemmed Government financial support and financial performance of SMEs: a dual sequential mediator approach
title_sort government financial support and financial performance of smes: a dual sequential mediator approach
publisher Elsevier BV
publishDate 2022
_version_ 1819301285403295744
score 13.4562235

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