Characteristics of manager's and SMEs performance: the role of access to finance as a moderator

  • Authors

    • Raed Khamis Alharbi Taif university
    • Sofri Bin Yahya usm
    • Essia Ries Ahmed usm
    2019-03-12
    https://doi.org/10.14419/ijet.v7i4.25620
  • SMEs Performance, Access to Finance, Characteristics of Manager.
  • Previous studies that examined the effect of characteristics of managers on the performance mainly concentrated large companies. The review of the small and medium enterprises (SMEs) literature reveals limited research has attempted to investigate the moderating effect of access to finance in SMEs, particularly in the developing countries. This study general reviews the moderating effect of access to finance on the relationship between characteristics of manager's related to age, education, experience and training and financial performance of SMEs in the developing countries. Findings of the study indicate the performance of SME vary with the choice of the characteristics of managers. Additionally, this study found that there is theoretical evidence showing the moderating effect of access to finance on relationships between characteristics and financial performance.

     

  • References

    1. [1] Alenzy, Z. M. (2018). Strategic approach of Saudi small and medium-sized enterprises: More of emergent or deliberate? International Business Research, 11(3), 110-117. https://doi.org/10.5539/ibr.v11n3p110.

      [2] Harash, E., Yahya, S. B., Ahmed, E. R., & Alsaad, F. J. (2013). Impact of Government policies in the Influence of Market practices on Financial Performance of small and medium enterprises (SMEs) in Iraq. Journal of Accounting and Business (JAB), 13(2).

      [3] Ode, E., Wombo, D. N., Ede, E. T., & Mile, N. B. (2014). Institutional support for small and medium enterprises in Nigeria: an empirical investigation. International Journal of Economy, Management and Social Sciences, 3(9), 481-489

      [4] Alrashidi, A. Y. (2016). The influence of SMEs decision-makers individual characteristics on risk perception associated with exporting: evidence from Saudi Arabia. European Journal of Business and Management, 8(2), 51-61.

      [5] FSB, (2013). Small Business Statistics. Retrieved from http://www.fsb.org.uk/stats.

      [6] Harash, E., Alsaad, F. J., & Ahmed, E. R. (2013). Moderating Effect of Government Policy on the Market Practices-Growth Relationship in Iraq SMEs. Open Science Repository Business Administration Online. Open-access (2013): e70081983.

      [7] Albliwi, S. A., Antony, J., Arshed, N., Arshed, N., & Ghadge, A. (2017). Implementation of Lean Six Sigma in Saudi Arabian organisations: findings from a survey. International Journal of Quality &Reliability Management, 34(4), 508-529 https://doi.org/10.1108/IJQRM-09-2015-0138.

      [8] Alsamari, H. A., Slade, H., Sharif, A. M., Saleh, W. (2013). The SMEs challenges and opportunities in Bahrain and Saudi Arabia. International Journal of Computer Networks and Wireless Communications, 3(2), 2250-3501.

      [9] Ayandibu, O. A., & Houghton, J. (2017). The role of SMEs in local economic development. Journal of Business and Retail Management Research, 11(2), 133-139.

      [10] Gbandi, E. C., & Amissah, G. (2014). Financing options for small and medium enterprises in Nigeria. European Scientific Journal, 10(1), 327-340.

      [11] Ngek, N., & Van Aardt Smit, A. (2013). Will Promoting More Typical SME Start-Ups Increase Job Creation in South Africa? African Journal of Business Management, 7(31), 3043-3051. https://doi.org/10.5897/AJBM12.1370.

      [12] Savlovschi, L., & Robu, N. (2011). The role of SMEs in modern economy. Economia Seria Management, 14, 277–281.

      [13] Al-Berjas, H. B. (2016). SMEs and economic growth. Saudi Gazette. Retrieved from saudigazette.com.sa/article/520008/opinion/local-viewpoint/SMEs-and-economic.

      [14] Zawya. (2014). Saudi Arabia sees potential in SME growth. Zawya: Thomson Reuters.

      [15] Alsulami, H. E. (2014). A framework for assessing the quality and effectiveness of a national employment system: A case study of Saudi Arabia. (Doctoral dissertation). University of Central Florida, Orlando, Florida.

      [16] Salem, I. M. (2014). The role of business incubators in the economic development of Saudi Arabia. International Business and Economic Research Journal, 13(4), 853-859. https://doi.org/10.19030/iber.v13i4.8694.

      [17] Reynolds, D. P. (2011). New firm creation: a global assessment of national contextual and individual factors. Foundations and Trends in Entrepreneurship, 6(5), DOI: 10.1561

      [18] Alabdullah, T. T. Y., Nor, M. I., & Ries, E. (2018). The determination of firm performance in emerging nations: Do board size and firm size matter? Management, 5(3), 57-66.

      [19] Alabdullah, T. T. Y. (2016). Corporate Governance from the Perspective of the Past and the Present and the Need to Fill an International Gap. Risk governance & control: financial markets & institutions, 6(4).

      [20] Walker, E., & Brown, A. (2004). What success factors are important to small business owners? International Small Business Journal, 22(6), 577-594. https://doi.org/10.1177/0266242604047411.

      [21] Theng, L. G., & Boon, J. L. W. (1996). An exploratory study of factors affecting the failure of local small and medium enterprises. Asia Pacific Journal of Management, 13(2), 47-61. https://doi.org/10.1007/BF01733816.

      [22] Henderson, J. C., & Nutt, P. C. (1980). The influence of decision style on decision making behaviour. Management Science, 371-386. https://doi.org/10.1287/mnsc.26.4.371.

      [23] Chen, A. H., Ng, S., & Rao, R. A. (2005). Cultural differences in consumer impatience. Journal of Marketing Researcher, 42(3), 291-301. https://doi.org/10.1509/jmkr.2005.42.3.291.

      [24] Timmons, J. A. (1994). New venture creation: entrepreneurship for the 21st Century.London: 4th Irwin.

      [25] Brockhaus, R. H. (1980). Risk Propensity of entrepreneurs. Academy of Management Journal, 23(3), 509-520.

      [26] McClelland, D. C. (1961). The achieving society. New York: Free. https://doi.org/10.1037/14359-000.

      [27] Woldie, A., Leighton, P., & Adesua, A. (2008). Factors influencing small and medium enterprises: an exploratory study of owner/manager and firm characteristics. Banks and Bank Systems, 3(3), 5-14.

      [28] Tanveer, M. A., Akbar, A., Gill, H., & Ahmed, I. (2013). Role of personal level determinants in entrepreneurial firm’s success. Journal of Basic and Applied Scientific Research, 3(1), 449-458.

      [29] Kristiansen, S., Furuholt, B., & Wahid, F. (2003). Internet café entrepreneurs: Pioneers in information dissemination in Indonesia. The International Journal of Entrepreneurship and Innovation, 4(4), 251-263. https://doi.org/10.5367/000000003129574315.

      [30] Alabdullah, T. T. Y. (2016). Are Board Size and Ownership Structure Beneficial In Emerging Markets’ Firms? Evidence from Jordan. International Journal of Management & Information Systems, 20(3), 87-94.

      [31] Kautonen, T. (2008). Understanding the older entrepreneur: Comparing third age and prime age entrepreneurs in Finland. International Journal of Business Science and Applied Management, 3(3), 3-13.

      [32] Ganyaupfu, E. (2016). Entrepreneur and firm characteristics affecting success of small and medium enterprises in Gauteng Province. International Journal of Innovative Research in Management, 2(9).

      [33] Valliere, D., Gedeon, S. A., & Wise, S. (2014). A comprehensive framework for entrepreneurship education. Journal of Business and Entrepreneurship, 26(1), 89.

      [34] Saleh, A. Y. A. (2016). Developing a model to predict the perofrmance of SMEs: the case of the Kingdom of Saudi Arabia. PhD thesis submitted to the Manchester Metropolitan University.

      [35] Mahmud, N., & Hilmi, F. M. (2014). TQM and Malaysian SMEs performance: The mediating roles of organisation learning. Social and Behaviour Sciences, 130, 216-225. https://doi.org/10.1016/j.sbspro.2014.04.026.

      [36] Sabah, S. (2016). Business, management and economics entrepreneurship-practice-oriented perspectives (edited by M. Franco) In Entrepreneurial intention: Theory of planned behaviour and the moderation effect of start-up experience. INTECH. https://doi.org/10.5772/65640.

      [37] Isaga, N. (2015). Owner-managers demographic characteristics and the growth of Tanzanian small and medium enterprises. International Journal of Business and Management, 10(5), 168. https://doi.org/10.5539/ijbm.v10n5p168.

      [38] Suliyanto, S. & Rahab, R. (2012). The role of market orientation and learning orientation in improving innovativeness and performance of SMEs. Asian Social Science, 8(1), 138-145.

      [39] Georgiadis, A., & Pitelis, C. N. (2016). The impact of employees' and managers' training on the performance of smallâ€and mediumâ€sized enterprises: evidence from a randomised natural experiment in the UK service sector. British Journal of Industrial Relations, 54(2), 409-421. https://doi.org/10.1111/bjir.12094.

      [40] Islam, M. A., & Siengthai, S. (2010). Human resource management practices and firm performance improvement in Dhaka export processing zone. Research and Practice in Human Resource Management, 18(1), 60-77.

      [41] Islam, M. A., Khan, M. A., Obaidullah, A. Z. M., & Alam, M. S. (2011). Effect of entrepreneur and firm characteristics on the business success of small and medium enterprises (SMEs) in Bangladesh. International Journal of Business and Management, 6(3), 289.

      [42] Hashim, J., Wok S., (2013). Competence, performance and trainability of older workers of higher educational institutions in Malaysia", Employee Relations, 36 (1), 82-106. https://doi.org/10.1108/ER-04-2012-0031.

      [43] Martin, B. C., McNally, J. J., & Kay, M. J. (2013). Examining the formation of human capital in entrepreneurship: a meta-analysis of entrepreneurship education outcomes. Journal of Business Venturing, 28(2), 211-224. https://doi.org/10.1016/j.jbusvent.2012.03.002.

      [44] Wanigasekara, W. M. S. K, & Surangi, H. K. N. S. (2011). Impact of level of education and business experience on business success among small retail owner managers in Sri Lanka, University of kelaniya. Paper to be presented at 2nd International Conference on Business and Information (ICBI) 20 October 2011.

      [45] Van der Sluis, J., M. van Praag, A. van Witteloostuijn (2007) “Why are the returns to education higher for entrepreneurs than for employees†Bonn, Institute for Labor. IZA Discussion Paper 3058.

      [46] Gunasekaran, A., Rai, B.K. and Griffin, M. (2011), “Resilience and competitiveness of small and medium size enterprises: an empirical researchâ€, International Journal of Production Research, Vol. 49 No. 18, pp. 5489-5509. https://doi.org/10.1080/00207543.2011.563831.

      [47] Karadag, H. (2017). The impact of industry, firm age and education level on financial management performance in small and medium-sized enterprises (SMEs): Evidence from Turkey", Journal of Entrepreneurship in Emerging Economies, 9 (3), 300-314. https://doi.org/10.1108/JEEE-09-2016-0037.

      [48] Ammari, G. (2015). Factors influencing performance of women owned small food business and hair dressing saloon enterprises in Moshi Municipality. European Journal of Business Management, 2(3), 119-123.

      [49] Thorsell, A & Isaksson, A 2014, ‘Director Experience and the Performance of IPOs: Evidence from Sweden’, Australasian Accounting, Business and Finance Journal, vol. 8, no. 1, pp. 3-24.

      [50] Jiang, F., Zhu, B & Huang, J 2013, ‘CEO’s Financial Experience and Earnings Management’, Journal of Multinational Financial Management, vol. 23, pp. 134–145. https://doi.org/10.1016/j.mulfin.2013.03.005.

      [51] Alabdullah, T. T. Y. (2016). The Performance of Companies and The Board’s Characteristics from the New Perspective of Manipulation Avoidance. Corporate Ownership & Control, 13(4), 279-286. https://doi.org/10.22495/cocv13i4c2p1.

      [52] Chen, C, & Huang, J.W (2009). Strategic human resource practices and innovation performance — the mediating role of knowledge management capacity. Journal of Business Research 62 (2009) 104–114. https://doi.org/10.1016/j.jbusres.2007.11.016.

      [53] Chahal, H., Jyoti, J., & Rani, A. (2016). The effect of perceived high-performance human resource practices on business performance: Role of organisational learning. Global Business Review, 17(3), 1083-1325.

      [54] Mayuran, L. (2016). Impact of Entrepreneurship Training on Performance of Small Enterprises in Jaffna District. G.J.C.M.P., Vol.5 (2):1-6.

      [55] Rogo, B. H., Shariff, M. N. M., & Hafeez, H, M. (2017). Moderating effect of access to finance on the relationship between total quality management, market orientation and small and medium enterprises performance: A proposed framework. International Review of Management and Marketing, 7(1), 119-127.

      [56] Chen, L. J., & Chen, S. Y. (2011). How the pecking-order theory explain capital structure. Journal of International Management Studies, 6(3), 92-100.

      [57] Harash, E., Al-Timimi, S. N., Alsaad, F. J., Al-Badran, A. Y. Z., & Ahmed, E. R. (2014). Contingency factors and performance of research and development (R&D): The moderating effects of government policy. Journal of Asian Scientific Research, 4(2), 47.

      [58] Liu, W., Cowling, M., & Zhang, N. (2014). The effect of enterprises’ growth orientation and access to finance on small firm performance: UK evidence in an economic recession. IBSS Working Papers, 3, 3-25.

      [59] Demir, F., & Caglayan, M. (2012). Firm productivity, exchange rate movements, sources of finance and export orientation (No. 37397). Munich.

      [60] Adomako, S., & Danso, A. (2014). Financial literacy and firm performance: The moderating role of financial capital availability and resource flexibility. International Journal of Management & Organizational Studies, 3(4), 1-15.

      [61] Al-Yahya, K., & Airey, J. (2013). Small and medium sized enterprises in MENA: Leveraging growth finance for sustainable development. Global Impact Investing Network.

      [62] Alabdullah, T. T. Y., Yahya, S., Nor, M. I., & Majeed, F. Q. (2016). An Investigation of Corporate Governance from A New Perspective: Examining the Financial Performance of Companies and The Impact of Executive Turnover. Corporate Board: role, duties and composition, 12(1), 53-69.

      [63] Alabdullah, T. T. Y. (2018). The Relationship between Ownership Structure and Firm Financial Performance: Evidence from Jordan. Benchmarking: An International Journal, 25(1), 1-17. https://doi.org/10.1108/BIJ-04-2016-0051.

      [64] Alabdullah, T. T. Y., Laadjal, A., Ahmed, E. R., & Al-Asadi, Y. A. A. (2018). Board Features and Capital Structure in Emerging Markets. Journal of Advanced Management Science Vol, 6(2). https://doi.org/10.18178/joams.6.2.74-80.

  • Downloads

    Additional Files

  • How to Cite

    Khamis Alharbi, R., Bin Yahya, S., & Ries Ahmed, E. (2019). Characteristics of manager’s and SMEs performance: the role of access to finance as a moderator. International Journal of Engineering & Technology, 7(4), 5115-5119. https://doi.org/10.14419/ijet.v7i4.25620