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Financial Constraints Help the ERP System Success Improving the SMEs’ Performance: An Empirical Study

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  • Steph Subanidja
  • Mercurius Broto Legowo

Abstract

Purpose: The study investigates if financial constraints help the ERP System success, and improve SMEs’ financial performance. Design/Methodology/Approach: There are 100 eligible data to be analyzed by using SPSS and the Smart-PLS. Findings: The results indicate that financial constraints have a significant impact on the success of the ERP System and the Indonesian SMEs’ performance. Furthermore, the ERP System helps to mediate between the financial constraints and the performance and the financial constraints are more crucial to improve the performance rather than the ERP system. Practical Implications: The financial constraints should be seen as an important instrument to improve the performance of both short and long-run periods of time. Then, it seems that in the future, the ERP will play an important role to improve the performance. Therefore, it needsl to prepare the implementation of the ERP system in a professionally way. Originality/Value: The study views the ERP system as an intervening variable, and as a new approach to mediate the financial constraints and the performance.

Suggested Citation

  • Steph Subanidja & Mercurius Broto Legowo, 2019. "Financial Constraints Help the ERP System Success Improving the SMEs’ Performance: An Empirical Study," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 294-304.
    • Handle: RePEc:ers:journl:v:xxii:y:2019:i:3:p:294-304
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    References listed on IDEAS

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    3. J.P. Kambey & N.F. Wuryaningrat & L.I. Kumajas, 2018. "Examining Leadership and Knowledge Sharing Role on Small and Medium Enterprises Innovation Capabilities," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 24-38.
    4. Dimitrios Maditinos & Alexandra Tsinani & Željko Šević & Jelena Stankevičienė, 2019. "Financially Constrained Firms: The Impact Of Managerial Optimism And Corporate Investment - The Case Of Greece," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 12(1), pages 39-49, April.
    5. Dimitrios Maditinos & Alexandra Tsinani & Zeljko Sevic & Jelena Stankeviciene, 2019. "Financially Constrained Firms: The Impact of Managerial Optimism and Diversification on Firms’ Excess Value: The Case of Greece," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 3-15.
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    More about this item

    Keywords

    Financial constraints; ERP system success; SMEs performance; Indonesia.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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