Cash flow management behaviours and sustainability of small and medium-sized enterprises: Do all the behaviours matter in a developing context?

Abstract

The purpose of this study is to examine whether all the cash flow management behaviours matter in fostering the sustainability of small and medium-sized enterprises (SMEs) in Uganda.The research utilised a quantitative methodology, employing a questionnaire to collect data from 233 SMEs in the northern part of Uganda. Descriptive statistics, factor analysis, measurement model assessment and structural model evaluation were performed to address the study's hypotheses.Study results indicate that financing, operating and investment cash flow behaviours do matter in fostering SME sustainability, unlike saving behaviours. This implies that SMEs have limited resources for saving while simultaneously engaging in social, environmental and economic activities.This study complements the existing literature on SME sustainability by presenting how specific cash flow management behaviours, particularly operating, financing, investing and saving behaviours, can influence the ability of SMEs to balance the environmental, social and economic aspects. As such, this study revealed that financing, investing and operating cash flow behaviours matter in promoting SME sustainability, unlike the saving behaviour. This strengthens extant studies that looked at cash flow management behaviour as a global variable in predicting budgeting behaviour and responding to the pandemic. It also augments studies that have looked at cash flow management behaviour as an outcome instead of predicting SME sustainability.