Impact of Digital Finance on New Venture Performance Along with the Moderating Role of Entrepreneurial Finance and Risk Management

Abstract

This research seeks to unravel the influence of digital finance on the performance of emerging ventures and delve into the moderating roles of risk management and entrepreneurial finance in shaping this dynamic relationship. This study tried to answer the question if digital finance plays a role in enhancing the performance of new ventures and whether entrepreneurial finance and risk management moderate this relation. The data used in our study is primary data, collected directly from the respondents through a structured questionnaire using convenience sampling techniques. The sampling unit were managers, owners, and employees of new ventures. The sample size was 370 individuals. A partial least square tool is used to analyze the data. Confirmatory factor analysis is conducted in which reliability and validity are examined by composite reliability, Cronbach alpha, AVE, and discriminant validity were measured using heterotrait-monotrait ratio. PLS structural model was used to investigate the relationship between variables. The study outcomes unveiled a noteworthy positive correlation between digital finance and the performance of new ventures. Additionally, a significant and positive association between entrepreneurial finance and new venture performance emerged, while an analogous positive relationship between risk management and new venture performance was also evident upon data analysis. Furthermore, risk management and entrepreneurial finance also play a moderating role between new venture performance and digital finance. This study will contribute to filling the gap in the literature and will help the researchers, teachers, students, and practitioners to better understand the direct impact of digital finance, entrepreneurial finance, and risk management and moderating effect of entrepreneurial finance and risk management on new venture performance. Practical implications of the study are that the study will help practitioners of newly initiated businesses to place importance on implementing each of the variables while running the business. The higher success rate of new ventures will motivate more people to start a new business and help to improve the economy. The cross-sectional design of the study, coupled with the utilization of a convenient sampling technique and a restricted sample size, introduces certain constraints and limitations to our research.