IDEAS home Printed from https://ideas.repec.org/a/rbs/ijbrss/v9y2020i4p153-160.html
   My bibliography  Save this article

Determinants of small and medium enterprises with the interaction effect of managerial activities

Author

Listed:
  • Muhammad Asif Khan

    (School of Management, Huazhong University of science and technology Wuhan, China)

  • Marium Burki

    (Department of Public Administration, Gomal University, Dera Ismail Khan, Pakistan)

Abstract

The financial system and capital market in developed countries are more developed as compare to emerging countries. Firms like small and medium enterprise (SMEs) needs finance to operate their business and make a competitive position in the market. In an emerging country like Pakistan, SMEs face a lot of financial and non-financial obstacles that may relate to the poor performance of SMEs. This study investigates the relationship between commercial loans, retain earnings, trade credit, managerial activities, and SME's performance. This study also investigates the interaction effect of managerial activities between independent variables and dependent variables. A survey was conducted in a small and medium enterprise of KPK Pakistan. Data were collected from 362 employees. SPSS (Statistical Package for the Social Sciences) software was employed for data analysis for descriptive and regression analysis. The finding confirmed that commercial loans, trade credit, retained earning have a positive and significant impact upon SME's performance. It is also found that managerial activities have played a mediating role and increased the performance of SMEs. Among variables under study, the more trade credit activities, the higher the performance of the SMEs is observed. Based on this study's results, Leaders, supervisors, and managers are those employees having a substantial role in the performance, development, failure, and success of an organization. Managerial activities are vital for a manager for the purpose to know what should be done in different circumstances and improve overall performance and accomplish organizational goals. Key Words: Small and medium enterprise, Commercial loans, Trade credit, Managerial activities

Suggested Citation

  • Muhammad Asif Khan & Marium Burki, 2020. "Determinants of small and medium enterprises with the interaction effect of managerial activities," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 9(4), pages 153-160, July.
    • Handle: RePEc:rbs:ijbrss:v:9:y:2020:i:4:p:153-160
    DOI: 10.20525/ijrbs.v9i4.750
    as

    Download full text from publisher

    File URL: https://www.ssbfnet.com/ojs/index.php/ijrbs/article/view/750/588
    Download Restriction: no
    File URL: https://doi.org/10.20525/ijrbs.v9i4.750
    Download Restriction: no
    File URL: https://libkey.io/10.20525/ijrbs.v9i4.750?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Weiming Li & Chunyan Li, 2015. "Entrepreneurship Education in China," Chapters, in: Jose C. Sanchez-Garcia (ed.), Entrepreneurship Education and Training, IntechOpen.
    2. Olof Ejermo & Jing Xiao, 2014. "Entrepreneurship and survival over the business cycle: how do new technology-based firms differ?," Small Business Economics, Springer, vol. 43(2), pages 411-426, August.
    3. Kenshi Taketa & Gregory F. Udell, 2007. "Lending Channels and Financial Shocks: The Case of Small and Medium-Sized Enterprise Trade Credit and the Japanese Banking Crisis," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 25(2), pages 1-44, November.
    4. Lee, Neil & Sameen, Hiba & Cowling, Marc, 2015. "Access to finance for innovative SMEs since the financial crisis," Research Policy, Elsevier, vol. 44(2), pages 370-380.
    5. Rosenbusch, Nina & Brinckmann, Jan & Bausch, Andreas, 2011. "Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs," Journal of Business Venturing, Elsevier, vol. 26(4), pages 441-457, July.
    6. Aydin Ozkan, 2000. "An empirical analysis of corporate debt maturity structure," European Financial Management, European Financial Management Association, vol. 6(2), pages 197-212, June.
    7. Jairaj Gupta & Andros Gregoriou & Jerome Healy, 2015. "Forecasting bankruptcy for SMEs using hazard function: To what extent does size matter?," Review of Quantitative Finance and Accounting, Springer, vol. 45(4), pages 845-869, November.
    8. Ndeye Ndiaye & Lutfi Abdul Razak & Ruslan Nagayev & Adam Ng, 2018. "Demystifying small and medium enterprises’ (SMEs) performance in emerging and developing economies," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(4), pages 269-281, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naradda Gamage, Sisira Kumara & Ekanayake, EMS & Abeyrathne, GAKNJ & Prasanna, RPIR & Jayasundara, JMSB & Rajapakshe, PSK, 2019. "Global Challenges and Survival Strategies of the SMEs in the Era of Economic Globalization: A Systematic Review," MPRA Paper 98419, University Library of Munich, Germany.
    2. Francesco Ciampi & Alessandro Giannozzi & Giacomo Marzi & Edward I. Altman, 2021. "Rethinking SME default prediction: a systematic literature review and future perspectives," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(3), pages 2141-2188, March.
    3. Santos, Anabela M. & Cincera, Michele & Cerulli, Giovanni, 2024. "Sources of financing: Which ones are more effective in innovation–growth linkage?," Economic Systems, Elsevier, vol. 48(2).
    4. Gupta, Jairaj & Gregoriou, Andros, 2018. "Impact of market-based finance on SMEs failure," Economic Modelling, Elsevier, vol. 69(C), pages 13-25.
    5. Bartz, Wiebke & Winkler, Adalbert, 2016. "Flexible or fragile? The growth performance of small and young businesses during the global financial crisis — Evidence from Germany," Journal of Business Venturing, Elsevier, vol. 31(2), pages 196-215.
    6. Anabela Marques Santos & Michele Cincera & Giovanni Cerulli, 2024. "Sources of financing: Which ones are more effective in innovation–growth linkage?," ULB Institutional Repository 2013/372408, ULB -- Universite Libre de Bruxelles.
    7. Jung, Hyejin & Hwang, JungTae & Kim, Byung-Keun, 2018. "Does R&D investment increase SME survival during a recession?," Technological Forecasting and Social Change, Elsevier, vol. 137(C), pages 190-198.
    8. Taghizadeh-Hesary, Farhad & Phoumin, Han & Rasoulinezhad, Ehsan, 2022. "COVID-19 and regional solutions for mitigating the risk of SME finance in selected ASEAN member states," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 506-525.
    9. Power Jane & Power Bernadette & Ryan Geraldine, 2022. "Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms," The Irish Journal of Management, Sciendo, vol. 41(1), pages 52-68, July.
    10. S. Arunachalam & Sridhar N. Ramaswami & Pol Herrmann & Doug Walker, 2018. "Innovation pathway to profitability: the role of entrepreneurial orientation and marketing capabilities," Journal of the Academy of Marketing Science, Springer, vol. 46(4), pages 744-766, July.
    11. Cowling, Marc & Ughetto, Elisa & Lee, Neil, 2018. "The innovation debt penalty: Cost of debt, loan default, and the effects of a public loan guarantee on high-tech firms," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 166-176.
    12. Agnieszka Kuś & Dorota Grego-Planer, 2021. "A Model of Innovation Activity in Small Enterprises in the Context of Selected Financial Factors: The Example of the Renewable Energy Sector," Energies, MDPI, vol. 14(10), pages 1-17, May.
    13. Schäfer, Dorothea & Stephan, Andreas & Mosquera, Jenniffer Solórzano, 2015. "Innovation Capabilities and Financing Constraints of Family Firms," Working Paper Series in Economics and Institutions of Innovation 425, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    14. Douglas Cumming & Lars Hornuf & Moein Karami & Denis Schweizer, 2023. "Disentangling Crowdfunding from Fraudfunding," Journal of Business Ethics, Springer, vol. 182(4), pages 1103-1128, February.
    15. Boeker, Warren & Howard, Michael D. & Basu, Sandip & Sahaym, Arvin, 2021. "Interpersonal relationships, digital technologies, and innovation in entrepreneurial ventures," Journal of Business Research, Elsevier, vol. 125(C), pages 495-507.
    16. Frida Thomas Pacho, 2018. "Diversified Network Effects on Innovation Performance in Tanzania: Innovation Strategy in Service Firms," Journal of Entrepreneurship and Business Innovation, Macrothink Institute, Journal of Entrepreneurship and Business Innovation, vol. 5(1), pages 1-1, December.
    17. Halil Dincer Kaya, 2023. "The Impact Of The 2008-2009 Global Crisis On Retailers’ And Core Industry Firms’ Loan Applications," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 16-24, February.
    18. Ioannis Giotopoulos & Alexander S. Kritikos & Aggelos Tsakanikas, 2023. "A lasting crisis affects R&D decisions of smaller firms: the Greek experience," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1161-1175, August.
    19. Anabela Santos & Michele Cincera, 2022. "Determinants of financing constraints," Small Business Economics, Springer, vol. 58(3), pages 1427-1439, March.
    20. Kafigi Jeje, 2020. "Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 1-22.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rbs:ijbrss:v:9:y:2020:i:4:p:153-160. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Umit Hacioglu (email available below). General contact details of provider: https://edirc.repec.org/data/ssbffea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.