The Role of Access to Finance, Learning Orientation, and Innovation on the Small and Medium Enterprises Performance: Moderating Effect of Business Risk

Abstract

The study aims to identify the role of Access to Finance, Learning Orientation, and Innovation on the performance of SMEs. The moderating effect of business risk also examined the relationship of Access to finance, learning orientation, innovation, and Small and Medium Enterprises (SMEs). For this purpose, Data is collected from 300 SMEs in the textile sector operating in Faisalabad, Pakistan. Primarily, the data is analyzed to check the normality and multicollinearity, and then Structure Equation Modeling (SEM) is developed in the Smart PLS-3. The significant contribution of the present research study is to identify the moderating effect of business risk on the relationship between Access to finance, learning orientation, innovation, and SMEs performance. The findings revealed that Access to finance, learning orientation, and innovation have a positive and significant impact on the performance of SMEs. Moreover, results also show the contribution of business risk, which moderates the relationship between Access to finance, innovation, and SMEs performance. However, business risk does not affect the relationship between learning orientation and SMEs performance. The practitioner and policy maker would be the beneficiary of the study while making policy and strategic decisions of the SMEs.