Abstract
The small and medium enterprise (SME) sector plays an important role in the development of the local, regional, and global economy. This study seeks to examine the relationships among several factors that are claimed to influence the performance of SMEs. Internal and external environmental factors, as well as the moderating role of gender on the research variables, are empirically examined. A survey of 142 entrepreneurs in the northern region of Tabuk, Saudi Arabia, using convenience sampling was conducted. Path analysis was used to test the research model using the Partial Least Squares (PLS) model by Warp PLS (ver. 7). Results suggest that both internal and external success factors influence enterprise performance. Based on statistically significant relationships, entrepreneurial orientation, human capital, and entrepreneur goals and motives (internal factors), as well as economic factors, socio-cultural factors, and legal and administrative factors (external factors) are influencing SME performance. Additionally, results indicate that SMEs almost perform at similar levels regardless of the gender of the SME owner. Gender is found to moderate the influence of economic factors, and legal and administrative factors on performance. There is no indication that gender moderates the influence of the rest of the factors on the performance. Such finding is surprising given the context of the study, i.e. Saudi Arabia was traditionally considered as a conservative male-dominated society. AcknowledgmentThis study was supported and funded by the research sector of Arab Open University – Kuwait Branch under decision number 21002. Authors would like to thank the National Entrepreneurship Institute “RIYADAH”, Tabuk branch, KSA for their support in data collection.
Highlights
The success factors that influence organizational performance, including the performance of small and medium enterprises (SMEs), have received growing attention throughout the past decades
According to Hair et al (2010, p. 98), Partial Least Squares (PLS) builds on a set of nonparametric evaluation criteria to assess measurement and structural model results
This study aimed to examine the relationships between internal and external success factors and SME performance
Summary
The success factors that influence organizational performance, including the performance of small and medium enterprises (SMEs), have received growing attention throughout the past decades. Practitioners, and policymakers are concerned with identifying the factors that positively affect the organizational and SME performance (Ramos et al, 2014; Hoque et al, 2018). Small and medium enterprises are found to contribute to local, regional, and international economic welfare. They combat unemployment and offer many advantages that cannot be overlooked.
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