The Recovery of Firm Performance: Does Government’s Non-Financial Support Really Matters?
DOI:
https://doi.org/10.1229/tecempresarialjournal.v17i2.99Keywords:
Business Performance, Credit Access, Innovative Investment, Risky Financing, Government Non-Financial Support.Abstract
Purpose: This research aims to aspire to examine the impact of credit access (CA), innovative investment (II), and risky financing (RF) on firm performance (FP). Then, it strives to demonstrate the mediating effect of II and RF and the moderating effect of the government’s non-financial support (GS) towards the impact of CA on FP.
Methodology: Primary data was collected from a survey of 102 small and medium-sized batik entrepreneurs in Lasem-Rembang and Bakaran-Pati, Central Java Province, Indonesia. The data was processed using a SEM-PLS analysis with a mediating and moderating effect.
Findings: II proved to have a significant positive effect on FP. In this model, II and RF could fully mediate CA's impact on FP. Meanwhile, GS could only strengthen the effect of CA on II. Furthermore, CA's impact on II strengthens when GS is low. There are still limited papers that have studied strategies for MSE performance from a collaborative perspective of the institutional and resource-based view theories. These two theories have become the rationale for how entrepreneurs maintain and manage businesses in the endemic transition period by utilizing CA, implementing II, applying RF, and coupling with GS intervention, which increases FP.
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