Abstract
Achievement of sustainable competitive position and superior performance is the first priority of business organizations. However, small firms, due to fairly known reasons; lack of resources, financial capabilities and lack of managerial skills are often unable to succeed in their mission. Hence, they often look for less risky and convenience sources to compete in the market. A variety of factors has been tested towards a firm competitive position and performance but the role of government support in this perspective has received minor attention. The present study examines the influence of government financial support and nonfinancial support on firm performance with mediating role of the sustainable competitive position. Hypotheses were tested using structural equation modeling in Analysis Moment of Structure (AMOS) on a data set of 326 Pakistani Small and Medium Size Enterprises (SMEs). The results indicate that government financial and nonfinancial support have a significant influence on sustainable competitive position and firm performance. Additionally, a sustainable competitive position partially mediates the relationship between government support and firm performance. Government bodies and policy makers are advised to provide financial and nonfinancial support to SMEs which in turn can upsurge economic growth and sustainability.
Highlights
Over the years, a variety of policies and programs have been put forth by governments across the globe to enhance economic sustainability, the standard of living as well as economic growth [1,2,3]
This study examines the impact of Government Financial Support (GFS) and GNFS on firm performance with a mediating role of Sustainable Competitive Position (SCP) by using data set of 326 Pakistani Small and Medium Size Enterprises (SMEs)
After applying Analysis Moment of Structure (AMOS), the results indicate that GFS and GNFS have a significant influence on SCP and firm performance
Summary
A variety of policies and programs have been put forth by governments across the globe to enhance economic sustainability, the standard of living as well as economic growth [1,2,3]. Governments, irrespective of countries, are engaged to determine regional and local factors which influence entrepreneurship This is because, in the current knowledge-based economy, entrepreneurship has become one of the most significant drivers of sustainable economic growth and development Doh and Kim [4]. Despite having a substantial contribution of SMEs (results of entrepreneurship) to GDP, economic growth and sustainable development goals, there is a high failure ratio of ventures across the globe [5]. Studies, in this perspective, have been discussed a variety of determinants which may affect success for example, [6,7] and failure of SMEs [8,9]. This study aims to check if government support indirectly influences firm financial performance through SCP
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