Enterprises In Pakistan Research Articles

Impact of Institutional Quality on Trade Performance of Small and Medium Enterprises in Pakistan

The trade economy is dependent upon the institutional quality of the country. It affects the ease of doing business in the economy. It is plausible to think that, how institutional quality can affect the trading performance of Pakistan. Small & medium enterprises (SMEs) are playing the role of the backbone of the trade sector in Pakistan. Contribution SMEs can be significantly improved, by improving the supporting macroeconomic indicators. This paper studies the short-run and the long-run association between SME trade growth and cost of production, relative prices, and Institutional quality in Pakistan. It also examines the Environmental Kuznets curve (EKC) hypothesis, between SME trade growth and institutional quality in Pakistan. This study utilizes secondary data, which is taken from multiple secondary sources, including the SMEDA, Pakistan Economic Survey, and world development indicators. The biannual data is assembled up for 38 observations from (2000 to 2019). This study uses Auto Regressive Distributive Lag (ARDL) bound testing method to examine the short run and long run connections between SMEs’ trade growth and macro-economic variables, like; relative prices, Cost of production. Gross Domestic Product, exchange rate, and institutional quality. These variables are selected from the available literature. The study finds that the short-run response of SMEs trade is not significant, but it significantly responds to macro-economic indicators in long run. The institutional quality has a non-linear relationship with SMEs trade growth. This indicates that the pollution heaven hypothesis holds valid even for the case of institutional quality and SMEs trading performance. The study focuses on the optimality of institutional quality for the optimal performance level of SMEs in Pakistan.

EXPLORATORY FACTOR ANALYSIS OF INTERNAL RESOURCE BASED VIEW FOR NEW PRODUCT DEVELOPMENT PROCESS IN PAKISTAN’S MANUFACTURING SECTOR

This study examines the elements that influence the internal resource based view of manufacturing enterprises in Pakistan, which is in line with the United Nations 2030 Sustainable Development Goals 9 and 12. The resources revealed in this study can be used as success factors in the development of new goods. Purposive sampling was used to collect data from a sample of 318 male and female employees working in the new product development process (NPDP) in various manufacturing organizations in Pakistan in order to meet the research objectives. A reliability test and an exploratory factor analysis were also used. Exploratory factor analysis yielded the identification of seven internal resources. Seven internal resources are subjected to a reliability test using Cronbach's Alpha, which meets the good reliability analysis criteria. RBV has rarely addressed the subject of resource identification in poor nations like Pakistan in prior studies, therefore this study will be useful for both industrialists and researchers in determining which resources are required for NPDP. In the future, the extracted dimensions of IRBV in this study can be used as independent variables in a theoretical framework, and their influence on the new product development process could be examined. Key Words: Internal Resource Based View, Exploratory Factor Analysis,Reliability Analysis, Manufacturing Sector

The Effect of Family Support on Owners’ Wellbeing and Performance of Women-owned Enterprises in Pakistan: The Mediating Role of Family-to-Work Enrichment, Complemented by firms and Owners Demographics.

Many women entrepreneurs venturing into the business world, are, however, still responsible for a larger portion of family responsibilities. Consequently, a deeper understanding of the bidirectional effect of family and work on women’s entrepreneurship and its uniqueness is vital. This study aims to explain how family support affects these women's well-being and their firms’ performance. In this regard, Neneh (2017) proposed a mediating role of family-to-work enrichment (FWE) on the relationship between family support and performance. We proposed a theoretical framework, modifying Neneh’s model to include wellbeing as in outcome, as well as demographics in a moderating role in family support and performance nexus. We argue that Family support is measured by 1. Emotional (ES), .2 Instrumental (IS), and 3. Financial Support (FS), leads to better family-to-work enrichment (FWE). FWE was measure by 1. Instrumental FWE, and 2. Affective FWE. Higher FWE would in turn increase the firms’ performance. It would also increase the well-being of these women entrepreneurs. We included four dimensions of Well-being namely 1. psychological (PWB), 2. social (SWB), 3. Workplace (WWB), and 4. subjective well-being (SBB). We also proposed a complementary role of entrepreneurs numbers of children, their education, and age, their firms’ size, and age, in family support and performance relationship, in a way that the effect of Instrumental, and Affective FEW on firms performed in less effective where women owners are more educated, having more age, and having larger firms size and age. Empirical validity was established by conducting a survey using a close-ended questionnaire. Data was collected from 530 women entrepreneurs as well as some of their family members and analyzed using confirmatory factor analysis and structured equation modeling. The results showed that ES and IS seem to have a significant positive effect on Affective and Instrumental FWE. FS also seems to affect affective FEW. Affective FWE in turn seems to positively affect firm performance. ES and IS also seem to have a significant positive effect on firms' performance (FP), Hence Affective FEW seems to partially mediate the effect of ES, FS, and IS on FP. Results also suggested a significant positive number of children on FP, whereas firms’ size seems to affect FP negatively. However, a higher firm size seems to make the ES-FP relationship weaker. On the other hand higher education level would strengthen the ES-FP nexus. With regards to wellbeing, ES and IS seems to positively affect all four dimensions of wellbeing i.e. PWB, SBB, SWB, and WWB. Affective FWE also seems to affect PWB, SWB, whereas, Instrumental FWE seems to positively affect PWB and WWB. Hence, Instrumental FWE seems to positively mediate the effect of ES and IS on PWB, and WWB, whereas Affective FWE mediates the effect of ES, FS, and IS on SWB. The findings emphases the need for the current system to take into account the distinctive needs and challenges of women entrepreneurs and provide the necessary support and environment to foster their growth and prosperity.

Impact of Foreign Direct Investment on Small and Medium Scale Enterprises in Pakistan

This study attempts to analyze the impact of foreign direct investment on the small and medium scale enterprises in Pakistan by using the annual time series data from period of 1982 to 2019. ADF unit root test, ARDL model and granger causality test are used to analyze the data. The outcomes of long-run ARDL model exhibits that foreign direct investment, gross savings, exports of goods and services positively enhance the performance of small and medium scale enterprises in Pakistan. In Granger causality analysis, it is found that there is a unidirectional causality between SME growth rate and foreign direct investment. The unidirectional causality is also observed between gross savings and SME growth rate. It is therefore suggested that an appropriate environment to the foreign investors may be provided to bring foreign direct investment inflows in a country. Government of Pakistan may improve the infrastructure in a country to increase FDI inflows.

Impact of regional cultures on business performance of women entrepreneurs with reference to small and medium enterprises in Pakistan

Women entrepreneurs’ role is considered crucial for the overall economic development and growth. Entrepreneurship is embedded in the cultural norms and values of the society, and it affects the way individual define their behaviour, activities in terms of risk taking proactiveness. The aim of this study is to investigate the influence of the two cultural dimensions of Hofstede’s model i.e., Masculinity and Individualism on the business performance of women entrepreneurs with special reference to small and medium enterprises. The Masculinity side of this dimension represents a preference in society for achievement while individualism indicates greater importance on attaining personal goals. The study intends to analyze the relationship of women entrepreneurship with cultural dimensions, Individualism and Masculinity in Pakistan’s two culturally diversified regions, Gilgit-Baltistan and Islamabad, home to large numbers of women entrepreneurs. To capture the diversity of these regions by using the technique of purposive sampling, a sample of 374 was collected, 51% participants from the capital city and 49% belonged to Gilgit-Baltistan. The findings indicate that regional cultures within the context of Masculinity and Individualism have significant but antagonistic influences on the business performance of women entrepreneurs.

Towards Sustainable Digital Innovation of SMEs from the Developing Countries in the Context of the Digital Economy and Frugal Environment

This study aims to explore the direct impact of the digital orientation, Internet of Things (IoT) and digital platforms on the sustainable digital innovation in the context of the digital economy and frugal environment. This study also investigated the mediating role of the digital platforms in these relations. The study was based on the quantitative research design and data were collected from the 397 CEOs and managing directors of Small and Medium Enterprises in Pakistan. Correlation and structural equation modeling approaches were applied for the analysis and testing of the hypotheses. Results revealed that the digital orientation, IoT and digital platform are major antecedents of the sustainable digital innovation. Results also show that the digital platforms mediate between both digital orientation-sustainable digital innovation link and IoT-sustainable digital innovation link. The rapid pace of change in the technology has forced the business organizations to think out of box and align their operational mechanism accordingly. The need for the sustainable digital innovation is a major need of the current decade for meeting the increasing demands of the society in a sustainable way. Organizations, especially SMEs, should be able to deal with these challenges and rapid technological transformations through cost effective frugal business models. The frugal innovation is an important element of sustainable digital innovation enables SMEs to reduce resources usage and waste and to enhance sustainable economic activities. In this way, they can develop and gain advantages in this highly competitive digital environment. This is the first study showing the bright harmony of the digital orientation, IoT and digital platforms for achieving the sustainable digital innovation in the rapid evolving digital economy.

The Effect of Technology and Open Innovation on Women-Owned Small and Medium Enterprises in Pakistan

The Effect of Technology and Open Innovation on Women-Owned Small and Medium Enterprises in Pakistan

An Empirical Investigation of Service Quality, Usage and Mobile Banking in Predicting Adaptive Performance: Serial Mediation Model

This study investigates the serial mediation between Service quality and adaptive performance of managers through usage and mobile banking incontextual framework ofSMEs’ enterprises of Pakistan. This study aims to find out how usage and mobile banking sequentially mediate the relationship between Service quality and adaptive performanceof managers at the workplace. This study's target population includes managers or owners of SMEs listed in Chambers of Commerce of Capital cities of Pakistan. As part of the more extensive research, 422 responses were received, which shows a 50% response. To test the hypotheses, structural and measurement models were developed in SEM. The findings show that serial mediation is observed in the case of service quality and adaptive performance as when we measure direct relation in the absence of mediators, it is significant and positive, as well as in the presence of serial mediators (usage and mobile banking) service quality, and adaptive performance is positive and significant. This study's findings will help the academia, banking sector, SMEDA and practitioners understand the importance of service quality, usage of mobile devices and mobile banking on adaptive performance. Future researchers must focus on practical investigation of testing the effect of system quality, information quality and usage of mobile devices, mobile banking to predict managers' adaptive performance by comparing SMEs and large enterprises in Pakistan.

An analysis of Covid-19 implications for SMEs in Pakistan

PurposeThe purpose of this paper is to ascertain the impact of coronavirus (Covid-19) on small and medium enterprises in Pakistan, which are vulnerable to crisis situations. This study also aims to provide policy recommendations to the stakeholders by reviewing the situation of small and medium scale enterprises (SMEs) after the Covid-19 sudden surge.Design/methodology/approachThe descriptive study is based on quantitative data technique and primary data collection is undertaken. The survey instrument is adapted from the US Bureau of Labor Statistics public documents. Collected responses from SME owners are descriptively analyzed using appropriate graphs.FindingsThe analysis infers that SMEs in Pakistan have encountered unfavorable implications of Covid-19 in the form of shortage of goods, blockage in transportation, decrease in demand of products and services, decline in profits and sales, limited operations, lockdown and employee’s layoff.Research limitations/implicationsThe limited sample and precise use of instruments are few limitations along with valuable implications of this research. The analysis of Covid-19 impact on SMEs is an ongoing phenomenon and aids in proactive planning for the second wave of this outbreak. Financing schemes, youth entrepreneurship loans, retention of skilled staff and proactive planning for adverse future are few recommended measures for revival of the SMEs sector.Originality/valueThe use of a unique sample and quality data set collected using the Bureau of Labor Statistics instrument adds value to the findings of the study and their consistency. The existing body of knowledge in the context of the SMEs sector of Pakistan is strengthened with an analysis of crisis implications for this sector, which remained unaddressed in the past.

Aspects Hindering the Development and Survival of Small and Medium-Sized Enterprises in Pakistan: Stability Perspective

This article intends to explore aspects that are hindering the development and survival of small and medium-sized enterprises (SMEs) in Pakistan. A survey was developed to collect statistics from 226 SME owners and staff in selected Punjab Provinces in Pakistan. Some statistical approaches accompanied the results of the survey to examine the elements hindering the development of SMEs in Pakistan. The results of the research indicate that the expected constraints, including lack of management knowledge, corruption, decaying infrastructure, absence of financial funds, and inadequate earnings are hindering SME development and survival in Pakistan. Considering the elements hindering the development will help legislators, federal and local concerns, NGOs, shareholders, policymakers, and others to create well-structured policies and plans that will aggressively promote the efficiency and stability of SMEs in Pakistan. The significance of this research derives from the reality that few studies have been conducted about the development and survival of SMEs in Pakistan with a stability perspective.

Impact of Inclusive Leadership on Innovative Work Behavior: The Role of Creative Self‐Efficacy

AbstractThis study examines the relationship between the relational mode of leadership (i.e., inclusive leadership) and innovative work behavior with the mediating role of creative self‐efficacy. Data were collected from employees of small and medium textile enterprises in Pakistan. Results show that there is a positive relationship between inclusive leadership and innovative work behavior. While aligned with previous research, the results of this study confirm the mediating role of creative self‐efficacy in inclusive leadership–innovative work behavior relationships. Based on its findings, this study recommends that human resource (HR) managers prioritize the hiring of leaders possessing inclusive attributes such as openness, availability, and accessibility. Additionally, the results of this study indicate that, in order to successfully implement new changes, it is important that HR managers hire employees evidencing innovative work behavior in a work setting.

Can Parents Be Attributed to Their Subsidiary Performance? A Multi-Level Analysis for Performance Determinants of Multinational Enterprises in Pakistan

International firms are highly sensitive to the performance of their subsidiaries and want to understand the factors behind their monetary success. Thus, numerous strategies are employed by these International firms to explore subsidiaries’ performance determinants; usually, these include subsidiary level attributes, ignoring the parent’s impact along with its country. To address this gap we construct a multi-level research that focuses the subsidiary, parent attributes along with countries’ Governance Indicators while predicting the determinants of subsidiary performance in Pakistan.We use two different levels i.e. parent & subsidiary level; multi-level analysis approach with HLM (Hierarchical Linear Model) in this research paper. Governance indicators of both parents and subsidiaries were taken explanatory factors along with Market growth, size, Performance, R & D, capital structure as well as asset management policies of parent. Subsidiary level factors included parents’ ownership, size, equity, and capital investment. 26 multinational companies listed on Pakistan Stock Exchange were included. Data was taken from the year 2012 to 2018. Selected companies cover around ten sectors of Pakistan Stock Exchange.The study revealed that on both levels; parents and subsidiaries, Governance institutions are more influencing factors rather than companies’ own attributes. We recommend that before investing in a country, international businesses should take into account Governance institutions (by World Bank); more than their own attributes.Originality/value - This study contributes to the existing approaches to determining subsidiary performance through adding Governance institutions and parent level attributes. Especially it explores the determinants of subsidiary performance in a developing country; Pakistan in the Asia continent.

The impact of total quality management and business networks on company export performance in emerging vs developed economies: evidence from furniture enterprises in Pakistan and the UK

The impact of total quality management and business networks on company export performance in emerging vs developed economies: evidence from furniture enterprises in Pakistan and the UK

Sustainable development: The colors of sustainable leadership in learning organization

AbstractSustainable development has emerged as a field of applied research across multi‐discipline. Sustainable leadership is a new domain of effective leadership, which has been established recently to cope with issues related to sustainable development. On the subject of natural resource‐based view (NRBV) and dynamic capability theory, this study examined methods of embedding sustainable leadership into sustainable performance and investigated the mediating effect of organizational learning to sustainable leadership and sustainable performance. The data in this study were collected from a total of 369 small and medium‐sized enterprises in Pakistan using a purposive sampling technique. Partial least squares structural equation modeling was used to analyze the data. The results revealed (a) a significant positive effect of sustainable leadership on organizational learning; (b) organizational learning significantly influences sustainable performance; (c) organizational learning partially mediates the relationship between sustainable leadership and sustainable performance. The present study offered an in‐depth theory of NRBV, dynamic capability, and sustainable development. Effective management advices are proposed for organizations encountering sustainable development challenges.

Moving beyond the mechanistic structures: The role of inclusive leadership in developing change‐oriented organizational citizenship behaviour

AbstractIn this study, we explore the relationship between inclusive leadership and change‐oriented organizational citizenship behaviour (OCB) with the mediating roles of behavioural integrity and trust in leadership. Data were collected from 151 supervisor–subordinate dyads from small and medium enterprises in Pakistan. The results revealed that inclusive leadership is positively related to change‐oriented OCB. Our study reaffirms the indirect effect of the inclusive leadership on change‐oriented OCB via behavioural integrity and trust in leadership. Finally, the results supported the chain of causality: sequential mediation of behavioural integrity, and trust in leadership between inclusive leadership and change‐oriented OCB. Causal attribution theory is used to support the findings. Implications for theory and practice are discussed.

A mediation analysis of social media marketing between the relationship of entrepreneurial marketing strategies and the performance of small & medium enterprises in Pakistan

Objectives: The main focus of this study is to find the role of social media marketing between the relationship of entrepreneurial marketing strategies and Performance of Small and medium enterprises (SMEs) in Pakistan. This research will answer the question that how social media marketing can be crucial for the entrepreneurial marketing to increase the performance of small and medium enterprises in Pakistan. Methodology: The SMEs operating in Pakistan have been considered and the respondents are the Marketing Managers of SMEs. The total number of SME’s in Pakistan is 3.3 million having one marketing manager. The total population of study is 3.3 million. Roscoe 1975 technique has used for selecting sample size. The 384 SME’s managers were selected through Roscoe sampling method and survey instrument has randomly been distributed among the marketing managers of SMEs in Pakistan through the primary data collection mode. Discussion: Hypotheses have been tested through “Structural Equation Modeling”. Since SEM is latest second generation tool of multivariate analysis and it has been used in this study to test the hypothesis. Findings: It is found from the results and discussion that entrepreneurial marketing strategies; proactive orientation, value creation,innovativeness and customer focus plays important role in enhancing the SMEs performance in Pakistan and Social media marketing can highly be effective to implement entrepreneurial marketing strategies to improve the performance of small and medium enterprises in Pakistan. Keywords: Entrepreneurial marketing strategies; SMEs Performance; role of social media marketing

Financial and Non-Financial Practices Driving Sustainable Firm Performance: Evidence from Banking Sector of Developing Countries

Since independence, state-owned enterprises in Pakistan have been struggling for performance enhancement. The goal of sustainable performance is still unachievable. Therefore, the paper evaluates sustainable corporate performance based on financial, social, and environmental performance areas. The organizational restructuring framework for sustainable performance enhancement is developed on software PLS-SEM. The financial and economic performance (FEP) was evaluated through financial reports and surveys; however, social and environmental performances (SEP) were quantified through survey questionnaires for seven performance areas with multiple sub factors, based on Weisbord’s six box model. The study time period in focus is 2011 to 2015. Data was collected from 517 employees of 19 public, private, and privatized banks of Pakistan. The results demonstrate that the total effect of FEP and SEP is much stronger (t-value = 7.619) than the individual direct impact of FEP (t-value = 5.189) on sustainable firm performance (SFP). This is a clear indication of the mediating role of SEP for SFP evaluation. Furthermore, FEP depends on significant indicators include net assets, total deposits, profit before tax, and earnings per share of total deposits with outer loadings, which are given as 0.995, 0.992, 0.978, and 0.954, respectively. Moreover, SEP depends on indicators, i.e., reward policies, redefining organizational purpose, coordination mechanism among employees, and supervisor relationships, with correlations of 0.864, 0.849, 0.805, and 0.761, respectively. The framework will assist in the enhancement of the performance of economically unviable public and loss-making privatized entities.

Access to Finance, Financial Development and Firm Performance – Evidence from Pakistan

Purpose- The aim of the study is to investigate the impact of financial constraints on firm performance. The role of financial development in reducing financial constraints is also investigated. Design/methodology/approach- Data from two waves of World Bank Enterprise Surveys from 2007 to 2013 was used to construct the required variables. A balanced sample of 427 firms was selected and a fixed-effect model was used for empirical estimations.
 Findings- The findings indicate the significance of access to finance in terms of explaining firm performance. Improvement in access to finance led to subsequent improvement in firm performance as measured by labour productivity. The role of financial development in reducing credit constraints is not as expected. The concentration of lending to the private sector in the hands of large corporations at the expense of small and medium enterprises could be the reason for such a result.
 Originality/value – Most of the work in this area is focused on large listed firms. The present study focused primarily on small and medium-sized enterprises in Pakistan. Multiple measures of financial constraints and firm performance were used for robustness. The investigation also covers the role of financial development and its microeconomic implications at the level of an enterprise.

Human capital and export performance of small and medium enterprises in Pakistan

PurposeThis study examines the influence of human capital, overall and by dimensions, on the export performance of small and medium enterprises (SMEs) in the manufacturing sector of Pakistan. The study also investigates the role of absorptive capacity in the relationship between human capital dimensions and export performance.Design/methodology/approachData from 586 manufacturing sector SMEs were collected for analysis. The study applied covariance-based structural equation modeling (SEM) to estimate the hypothesized relationships.FindingsAs a whole, human capital was found to exert a direct and indirect impact on export performance, particularly for the medium-sized firms and for firms with medium to high levels of export intensities. Nevertheless, not all dimensions of human capital mattered for export performance. Education and training were found to pose the greatest influence on export performance of those firms.Research limitations/implicationsThe results suggest that when devising appropriate policies for SMEs, the impact of different dimensions of human capital need to be considered for addressing challenges related to the internationalization of firms. In short, developing the right human capital is essential for SMEs to compete at the international level.Originality/valueUnlike previous studies, this study decomposed the influence of different dimensions of human capital on export performance and assessed the mediating role of absorptive capacity. The study is also among the pioneering studies in SMEs sector of Pakistan to analyze the role of absorptive capacity in the relationship between various dimensions of human capital and export performance.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2019-0198

Institutional Drivers for Managers: A study on Training Adoption and its Impact on Social Enterprises Legitimacy and Performance in Pakistan

BACKGROUND: Despite wide global attention to training programs in business organizations, research on training programs and their outcomes at the social enterprises in general is very limited. This study aims to explicate the drivers and effects of manager’s training.OBJECTIVE: Based on institutional theory, this research explores the reasons why social enterprises train their managers as well as how the legitimacy and performance improves in response to training.METHODS: Our theoretically derived model is tested using survey data obtained from ninety-nine senior managers of social enterprises in Pakistan. Data was analyzed through Partial Least Square structural equation modeling method (PLS-SEM).RESULTS: The results of analysis support the idea that training of managers is synergistically and interactively driven by institutional forces e.g. normative, mimetic and coercive pressures. These institutional pressures spur social enterprises and induce them to adopt training programs to enhance their external and internal legitimacy and improve their performance.CONCLUSIONS: This research emphasizes the importance of institutional pressures in adopting training programs in social enterprises. In sum, the present study provides important insights for senior managers in social enterprises who seek to foster external and internal legitimacy and improve performance. This study makes important contribution to the literature by developing an empirical link between institutional pressures and social enterprises performance. This research reiterates finding in previous studies to show the significance of the institutional forces in adoption of certain practices e.g. training of managers, to monitor the outcomes of training and providing further explanation regarding effects of training on legitimacy and performance.