Working Capital Financing and Competitiveness: A Study of SMEs in the Metropolitan District of Quito, Ecuador

Abstract

Introduction: The research examined the relationship between working capital financing strategies and competitiveness strategies in SMEs in the manufacturing sector in DMQ, Ecuador. Methodology: A mixed-method approach was employed with a non-experimental, cross-sectional, and longitudinal design, using a sample of 344 companies. Results: The results indicate that SMEs during the 2020-2022 period, due to economic instability, predominantly adopted a conservative financing strategy. Discussion:The prevailing competitiveness strategy among these companies is cost leadership. Furthermore, statistical analysis revealed that there is no strong, direct, and significant relationship between the study variables. It is concluded that during economic instability, companies adopt a conservative financing strategy to minimize risks and ensure operational solvency. Conclusions: Conversely, during economic recovery, they adopt an aggressive approach to capitalize on growth opportunities. Cost leadership predominates in this group of companies, characterized by cost and process control, investment in market research, sales incentive systems, strategic suppliers, and investment in suitable technology. The lack of relationship between variables suggests the influence of other internal or external factors on business competitiveness.