Network-based bootstrapping and performance in SMEs: the moderating role of entrepreneurship training

Abstract

This study evaluates how the use of financial bootstrapping - i.e., cash management techniques which are linked to the exploitation of different networks - and human capital components impact employment growth of small and medium-sized enterprises. The proposed hypotheses are tested on a sample of 70 Hungarian small and medium-sized businesses. Results reveal that the effect on employment growth of network exploitation via bootstrapping techniques is conditioned by the presence of entrepreneurial training. While bootstrap finance related to suppliers is positively associated with employment growth, it was found that entrepreneurial training positively moderates the relationship between employment growth and bootstrapping techniques related to business and customer networks. The results of this study offer relevant theoretical and managerial implications.