Sustainability Customer Satisfaction Smes Pandemic 6

Journal of Small Business & Entrepreneurship
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/rsbe20
Finance, financial literacy and small firm financial

growth in Bangladesh: the effectiveness of
government support
Md. Mosharref Hossain , Yusnidah Ibrahim & Md. Mohan Uddin
To cite this article: Md. Mosharref Hossain , Yusnidah Ibrahim & Md. Mohan Uddin
(2020): Finance, financial literacy and small firm financial growth in Bangladesh: the
effectiveness of government support, Journal of Small Business & Entrepreneurship, DOI:
10.1080/08276331.2020.1793097
To link to this article: https://doi.org/10.1080/08276331.2020.1793097
Published online: 22 Jul 2020.
Submit your article to this journal
Article views: 8
View related articles
View Crossmark data
Full Terms & Conditions of access and use can be found at

https://www.tandfonline.com/action/journalInformation?journalCode=rsbe20
JOURNAL OF SMALL BUSINESS & ENTREPRENEURSHIP
https://doi.org/10.1080/08276331.2020.1793097
Finance, financial literacy and small firm financial growth

in Bangladesh: the effectiveness of government support
Md. Mosharref Hossaina, Yusnidah Ibrahimb and Md. Mohan Uddinc
a
Bangladesh Institute of Bank Management, Dhaka, Bangladesh; bSchool of Economics, Finance and
Banking, College of Business, Universiti Utara Malaysia, Sintok, Kedah, Malaysia; cSchool of Business
& Economics, United International University, Dhaka, Bangladesh
ABSTRACT ARTICLE HISTORY

Although firm growth is an old issue, very limited number of Received 26 November 2019
studies have found on the issues of small firm growth. Studies in Accepted 2 July 2020
many countries have focused on some specific growth factors
KEYWORDS
and no comprehensive research on this issue is available to draw
Small firm; growth; finance;
a conclusion. Based on the concept of the theory of ‘Resource financial literacy;
Based View (RBV)’, current study motivated to see how the government support
resources like finance and financial literacy of owner-manager
affect financial growth of small firms and the role government MOTS-CLÉS
support plays in that relationship. Data was collected through Petite entreprise; croissance;
questionnaire from 407 owner-managers of small firms. Using par- finance; connaissances
tial least squares, the study found that both finance and financial financieres; soutien
literacy has strong positive relation with small firm financial gouvernemental
growth. Astoundingly, the study uncovered that government
support does not moderate the relationships between finance,
financial literacy and small firm financial growth in the expected
way, which the study argues to be a result of the seemingly
weakness of the government support distributions. Therefore,
policy makers and practitioners should ensure the better access
to financial resources of small firms and required financial literacy
of owner-managers as well as effective government support for
fostering more growth of small firms.
RÉSUMÉ
Bien que la croissance des entreprises soit une question ancienne,
tres peu de recherches ont examine la question de la croissance
des petites entreprises. Dans de nombreux pays, les etudes se
sont concentrees sur certains facteurs specifiques de croissance,
et aucune recherche exhaustive sur cette question n’est disponi-
ble pour que l’on puisse en tirer une conclusion. Basee sur la
theorie de la « vue basee sur les ressources (RBV) », cette etude a
ete motivee par la volonte d’examiner comment les ressources,
telles que la finance et les connaissances en matiere de finance
des proprietaires-gestionnaires, impactent la croissance financiere
des petites entreprises, et le ro^le joue par le soutien gouverne-
mental dans ce rapport. Les donnees ont ete collectee par le biais
d’un questionnaire soumis a 407 proprietaire-gestionnaires de
petites entreprises. En utilisant la regression par moindres carres
partiels (PLS), l’etude a revele que la finance comme les
CONTACT Md. Mosharref Hossain mosharref04@gmail.com Bangladesh Institute of Bank Management,

Dhaka, Bangladesh.
ß 2020 Journal of the Canadian Council for Small Business and Entrepreneurship/Conseil de la PME et de l’entrepreneuriat
2 M. M. HOSSAIN ET AL.
connaissances en matiere de finance ont un fort impact positif

sur la croissance financiere des petites entreprises. Etonnamment,
l’etude a egalement revele que le soutien gouvernemental ne
joue pas un ro ^le de moderateur concernant le rapport entre la
finance, les connaissances en la matiere et la croissance financiere
des petites entreprises de la façon attendue, ce qui resulte, selon
l’etude, de l’apparente faiblesse des systemes de distribution de
ce soutien. Par consequent, les decideurs et les praticiens politi-
ques devraient garantir un meilleur acces des petites entreprises
aux ressources financieres, et des proprietaires-gestionnaires aux
connaissances financieres requises, de m^eme qu’un soutien gou-
vernemental efficace pour stimuler la croissance des petites
entreprises.
1. Introduction
The significant role of small firms in the sustainable growth, employment creation,
entrepreneurship development, and export earnings of developing economies has
been well-accepted by the scholars (Mamun, Hossain, and Mizan 2013). Small firms
are the majority among the small and medium enterprises of an economy. In
advanced economies, small and medium enterprises contribute more than 65% of
total employment and more than 50% to gross domestic product (GDP)
(Weerakkody 2014). On the contrary, in the low income countries small and medium
enterprises contribute more than 70% of total employment and more than 60% of
GDP. If we look at middle income countries, 95% of total employment and 70% of
GDP are contributed by small and medium enterprises (Subhan, Mehmood, and
Sattar 2013). Bangladesh is a lower-middle income country, in which its small and
medium enterprises sector account for 90% of the private sector enterprises and con-
tributes to 25% of its GDP, to 40% of its gross manufacturing output, and to 25% of
its total labor forces’ employment (Alo 2014, Februry 7).
Greater contribution of the small and medium enterprises sector necessitates the
growth of the small firms. Hence, the issue of small firm growth and its determinants
has attracted considerable amount of scholarly attention in the recent years. However,
the concerned literature is still fragmented and yet to establish a specific theory
explaining small firm growth (Olaore 2014). The lack of a single overarching model
that could explain small firm growth has been pronounced by many researchers
(Dobbs and Hamilton 2007; Omar, Lim, and Basiruddin 2014). Researchers of differ-
ent field explain firm growth from various corners and also try to develop many per-
spectives. Their contributions can broadly be described by two viewpoints. A good
number of researchers suggest that the growth of a firm is linear or predictable
whereas the other groups of researchers consider it as opportunistic or unpredictable.
These are mainly due to the heterogeneous concept of growth to the different entre-
preneurs (Gupta, Guha, and Krishnaswami 2013).
Since firm can grow in different ways, the growth of a firm follows a multidimen-
sional phenomenon with various determinants (Delmar, Davidsson, and Gartner
2003). As small businesses around the world do not have the same characteristics,
JOURNAL OF SMALL BUSINESS & ENTREPRENEURSHIP 3
their growth is multifaceted and could be differentiated in terms of the nature of gov-
ernment support they get, it has been quite difficult for researchers to conclude with
a specific set of factors. Based on the theoretical concept in the Resource Based View
(RBV), the current study intends to see how the resources affect the growth of small
firms operating in Bangladesh and how the government support plays a role in this
effect. According to the concept of the RBV, the two important resources (financial
resources and financial literacy of the owner-manager) have been used to formulate
the research framework.
Small businesses all over the world face the scarcity of internal and external finan-
cial resources (Beck, Demirg€ uç-Kunt, and Maksimovic 2005; Malo and Norus 2009;
Rahaman 2011; Raravi, Bagodi, and Mench 2013). The degree of this financial con-
straint varies depending on the nature of business and the countries. Developing
countries are found to face more constraints than that of the developed countries
(Delberg 2011). Like other developing countries, financing has been identified as a
major issue for small firm growth in Bangladesh (Akterujjaman 1970; Chowdhury,
Azam, and Islam 2015) as this sector has much restricted access to finance in formal
institutional sources in Bangladesh (Islam, Yousuf, and Rahman 2014). The issue of
small firm financing problem in Bangladesh has been indicated in many studies
(Choudhury and Raihan 2000; Ahmed 2004; Rabbani and Suleiman 2005; Alam and
Ullah 2006; Chowdhury 2007b; Chowdhury and Ahmed 2011; Zaman and Islam
2011; Khan et al. 2012; Mamun, Hossain, and Mizan 2013; Uddin and Bose 2013;
Haider and Akhter 2014; Islam, Yousuf, and Rahman 2014). However, particularly for
developing countries like Bangladesh, no study, to the best of authors’ knowledge, has
documented the impact of finance on small business growth. Therefore, it is neces-
sary to see the impact of finance on the small firm growth in Bangladesh.
Empirical studies reveal the lack of financial literacy among the owner-managers
of small businesses in most of the advanced and developing economies (Cole,
Sampson, and Zia 2009; Lusardi and Tufano 2009). The lack of financial literacy
restrict people from access to information about financial products and services
(Beck, Demirguc-Kunt, and Martinez Peria 2007; Miller et al. 2009). Also in
Bangladesh, most of the owner-manager of small businesses lack financial literacy
that may result poor financial access and management. More specifically, Chowdhury
(2007a) highlights that most of the owner-manager lack proper knowledge on credit
sources and terms and conditions that results them to have a limited access to the
formal credit. Thus, Choudhury (2014) rightfully indicates the lack of financial liter-
acy as a major barrier to financial inclusion, which in turn may influence the growth
of the small firms. Despite such indication, the literature on the influence of financial
literacy on small firm growth is very rare, if any, in the context of Bangladesh.
Hence, this study attempts the scholarly documentation of such relationship.
Government plays a pivotal role for developing the small firms both in developed
and developing countries (Handoko, Smith, and Burvill 2014). Realizing the import-
ance of the small firms, each government has their own policy initiatives often with a
package of supports including the enhancement of access to finance and information,
development of infrastructures facilities, and ensuring the regulatory, legal and con-
ducive environment for small firms. The government of Bangladesh and its related
agencies also have undertaken similar policy initiatives to support small firms
(Mamun, Hossain, and Mizan 2013). This study attempts to examine if the supports
from the government effectively enhance the influence of finance and financial liter-
acy on small firm growth.
2. Objective of the study

The study intents to explore the impact of resources on the financial growth of small
firms operating in Bangladesh. The specific objectives of the study are to:
i. Examine the relationship between finance, financial literacy of the owner-man-

ager, and small firm financial growth.
ii. Examine whether government support enhance the relationship between finance,
financial literacy of the owner-manager, and small firm financial growth.
3. Literature review
The theory of RBV (Barney 1991) considers the firm as the bundle of resources and
suggests that resources that a firm has are the primary determinants for its growth or
performance. The resources describe in the RVB can be tangible that include assets,
capital, financial, human resource, etc. or intangible that include skills, knowledge,
strategy, information, business process, reputation, patent and others (Runyan,
Huddleston, and Swinney 2006). This article considers tangible (financial resource)
and intangible (financial literacy) resources to show their impact on the growth of
small firm as well as government support that may play an important role in the out-
come of these resources.
From its inception to till date, a considerable amount of studies those focus on
firm growth significantly use RBV theory for their theoretical framework
(Weinzimmer, Nystrom, and Freeman 1998; Delmar 2006; Kelliher and Reinl 2009;
Achtenhagen, Naldi, and Melin 2010). Many studies explain the relationship of firm
resources and capabilities with its growth and find a diverse relationship (Gibb and
Davies 1990; Conner and Prahalad 1996; Churchill and Mullins 2001; Aragon-Correa
and Sharma 2003; Davidsson, Delmar, and Wiklund 2006). Study of Gottschalk
(2007) concludes that the resources of a firm have significant influence on firm per-
formance. Moreover, Mac An Bhaird (2010) suggests that the RBV is more relevant
in the field of SME due to the importance of intangible resources.
3.1. Finance and small firm growth

A large body of literature on different countries showed that there is a good associ-
ation between finance and the growth of small firms. Some studies highlighted that
the availability of finance is the prime factor for the success and growth of SMEs
(Cook 2001; Ou and Haynes 2006). By analyzing the sample from the listed and
unlisted small firms, Chittenden, Hall, and Hutchinson (1996) showed that finance is
significantly related with the growth of small firms. Mambula (2002) and Yazdanfar
(2012) explored that the main barrier of growth for the micro and small firms is the
lack of finances. Some studies concluded that financing constraints have negative
influence on the firm growth (Beck, Demirg€ uç-Kunt, and Maksimovic 2005;
Ayyagari, Demirg€ uç-Kunt, and Maksimovic 2008). For example, Beck, Demirg€ uç-
Kunt, and Maksimovic (2005) from their cross-country analysis revealed that firms
bear a 3% growth penalty that face finance as a main constraint compared to the
firms that do not face it. Another study in Eastern Europe revealed the interesting
findings that firms with access to formal financial institutions exhibit 9% higher
employment growth and 36% higher sales growth for the period of 2002 to 2005
(The World Bank 2009).
Empirically it has been tested by different researchers in many countries to find
out the association between internal financing and small business growth. Stam and
Garnsey (2007) explored the relationships between the start-up capital and the busi-
ness growth and showed that out of the five studies on impact of start-up finance on
firm growth or performance, three studies showed the positive relationship and the
other two showed insignificant relationship. Chen, Babb, and Schrader (1985) consid-
ered the profitability as the proxy of internal financial resources to see the relation-
ships with firm growth. They concluded that profitable firm have more internal
finance to generate the growth and subsequently can sustain that growth for the long
run. Study conducted by Rahaman (2011) revealed that the effect of internal funds is
statistically significant with firm growth and shows the strong positive relationship.
He also found that if internal funds increase for 10%, the growth of the firm will
increase at 7.39%.
Small firms all over the world have been found restricted access to the external
financing sources which is the significant constraint for their business operations and
growth (Berger and Udell 1998; Carpenter and Petersen 2002; Galindo and
Schiantarelli 2003; Kumar and Francisco 2005; Ayyagari, Demirg€ uç-Kunt, and
Maksimovic 2007). Similarly, the study of Beck et al. (2006) revealed that the higher
external financing obstacle can be translated as the slower growth for small firms.
Hall, Hutchinson, and Michaelas (2004) and Cassar and Holmes (2003) showed
that the external finance, both short and long term, had positive associations with
firm growth. Musso and Schiavo (2008) conducted a study on 15,000 manufacturing
firms in French. Their study also showed that access to external finance had a signifi-
cant positive impact on the growth of the firms. In summary, most of the empirical
studies indicated that the growth of small firms was positively related to the exter-
nal financing.
3.2. Financial literacy of owner-manager and small firm financial growth

Financial literacy has been captured as one of the most interesting issues in any coun-
try and has gained much interest (Wachira and Kihiu 2012). In response, researchers
attempted to describe and measure the financial literacy (Huston 2010). Several terms,
such as financial literacy, financial education, financial knowledge, and so forth, are
found to be used interchangeably. According to Pipreka (2009), financial literacy is
the knowledge skills and information related to the financial issues by which the level
of financial understanding of an entrepreneur can be measured. According to

Gavigan (2010), it is the ability to make qualified judgments and accurate decisions
for better use and managing money. On the other hand, Remund (2010) refers finan-
cial literacy as the position of one’s understanding about the key concepts of finance
and the capability of managing finances with proper decision-making and appropriate
financial planning.
Due to the complexity in the business finance arena, owner-managers of small
businesses are confronted with complex financial decisions in order to operate their
businesses. Financial literacy therefore should be considered as a crucial skill for
them. However, empirical studies revealed that in most of the countries, the level of
financial literacy is very low and only a few people understand the basic financial
concepts (Cole, Sampson, and Zia 2009; Lusardi and Tufano 2009). Most of the stud-
ies (Watson, Stewart, and BarNir 2003; Barringer, Jones, and Neubaum 2005;
Ahamad et al. 2012; Peters et al. 2014) indicated that the higher level of educational
background expedite the growth or performance of the small firms.
Study conducted by Ganyaupfu (2013) found the positive relationship between the
education and the small firm success. A good number of studies (Christelis, Jappelli,
and Padula 2010; Smith, McArdle, and Willis 2010; Yoong 2010; Lusardi and
Mitchell 2011) revealed that there is a strong positive relationship between financial
literacy and financial outcomes. According to Siekei, Juma, and Aquilars (2013),
financial literacy correlates with the business performance as it improves the ability
of the owner-manager related to the financial aspects of the business. Study con-
ducted by Bruhn and Zia (2011) on young firms found that the owners-managers
with high financial literacy levels achieved better business performance and sales.
According to Nunoo and Andoh (2012), in order to understand the financial prod-
ucts and services the owners of the SMEs should have the financial literacy as low
level of literacy prevent them from using services of financial institutions. Small firm’s
growth is arguably linked with the greater financial outcome, increased sales, and
other performance. Therefore, existing literature indicates the link between financial
literacy of owner managers and small firm growth, however, with a lack of clear
documentation in the developing market context like Bangladesh.
3.3. Government support and small firm financial growth

Small enterprises all over the world deserve more help form the government for their
growth and success. Baum and Locke (2004) argued that the success of the entrepre-
neurship business primarily depends on the role that any government plays for devel-
oping the business. According to L€ utkenhorst (2006), the success of SME sector is
highly linked to how the government provides support to the business through devel-
oping policies and programmes and creating conducive environment for the survival
of firms. Many studies found the positive relationship between government support
and SME growth or performance although some other studies found insignificant
relationship between two constructs. Study of Jasra et al. (2011) found some factors
including government support had significant association with the success of small
and medium enterprises. Uddin and Bose (2013) from the sample of Bangladesh
Finance
Small Firm Financial Growth
Financial Literacy
Government Support
Figure 1. Research model.
revealed that government support is significantly and positively correlated with the
SMEs success. Study of Kamunge, Njeru, and Tirimba (2014) also found government
policy and the regulations as the serious obstacles that affect the performance of
SMEs in Kenya.
Although a large body of literature found the positive relationship between govern-
ment support and SME growth or performance, many studies revealed insignificant
or even negative relationship. Study of Vixathep (2014) and Egena et al. (2014) in
Nigeria showed that government support has no substantial impact on the perform-
ance of SMEs. Rahman et al. (2019) found that government support did not play any
instrumental role in increasing the financial and non-financial performance of the
base of pyramid entrepreneurs in Bangladesh. Similarly, a study of Chen and Parker
(2007) on Taiwanese SMEs related to clothing and textiles industry also showed that
government support is not useful for improving the performance of SMEs. Moreover,
study of Man (2014) in Malaysia revealed that SME sector in the country do not
depend on government support for their business operations and such support do
not play significant role for enhancing the performance of SMEs.
From the above discussion, it is found that the literature specifically on small firm
growth is very scant and the link between the resources used in the study with small
firm growth is also limited and inconsistent. Even the findings of these previous stud-
ies either specifically on small firms or SMEs show conflicting results. Where there
are inconclusive findings of previous research, Baron and Kenny (1986) suggested a
test of moderation effect. Such a notion motivates the researcher to examine the
moderating role of the government support on the relationships between finance,
financial literacy and small firm growth.
4. Research model and hypotheses

From the literature review it is evident that the growth phenomenon of small busi-
ness is heterogeneous mainly due to the impact of various internal and external
resources. As per the concept of the theory of RBV (Barney 1991) two important
resources, finance and financial literacy of owner-manager, are used as the independ-
ent variables to find out their impact on the growth of small firms. Figure 1 shows
the proposed model. In addition to the direct relationship between the independent
and dependent variables, the study also uses government support as the moderating
variable with the expectation that it will enhance the relationship between the inde-
pendent and dependent variables.
After establishing the business, small firms use their internal funds for the oper-
ation and expansion of the business. But, when the internal funds of the firm are
exhausted, firms mostly rely on the external funds. As financial resources are the fun-
damental requirements for the firm growth, the framework shows that there should
have some relationship between the financial resources and the small firm growth. If
firms are able to finance their operations with the internal or external funds, it may
affect positively to the growth of small firm.
A vast majority of the previous studies (Ayyagari, Demirg€ uç-Kunt, and
Maksimovic 2008; Franco and Haase 2010; Ahmed and Hamid 2011; Rahaman 2011;
Yazdanfar 2012; Raravi, Bagodi, and Mench 2013; Islam, Yousuf, and Rahman 2014)
found that financial resources, both internal finance and external finance, and the
growth (financial and non-financial) of small firms are significantly positively corre-
lated. Although small businesses all over the world face severe internal and external
financial problem (Malo and Norus 2009; Raravi, Bagodi, and Mench 2013), the
developing countries face more constraints compared to the developed countries
(Delberg 2011). In Bangladesh like many other developing countries small firms face
severe constraints while financing their start-up, operations, and growth. Their access
to formal credit is not easier compared to medium and large enterprises. Thus, this
financing problem hinders their normal business operations that subsequently hinders
the potentiality of future growth (Chowdhury and Ahmed 2011; Khan et al. 2012;
Mamun, Hossain, and Mizan 2013; Uddin and Bose 2013; Islam, Yousuf, and
Rahman 2014). Therefore, the study expects that if small firms operating in
Bangladesh have better access to financial resources their financial growth will be
enhanced. Hence, the study recommends the following hypothesis:
H1: There is a significant positive relationship between finance and small firm financial
growth in Bangladesh.
Financial literacy is one of the important characteristics of owner-manager that
enhances their knowledge, skills, and qualities capabilities to effectively manage the
financial resources. In order to manage the financial activities, proper investment and
dealing with the external financial environment, financial literacy of the owner-man-
ager is the precondition.
For small businesses, generally the owner-manager starts the business and accepts
all the responsibilities for the operations of the firm. Therefore, the growth of the
firm depends on the effective financial management. Nowadays the business environ-
ment is very complex and most of the owner-managers of small businesses face sev-
eral problems while taking important financial decisions in order to operate their
businesses. In this regard, financially literate owner-manager can effectively manage
the firm financial resources and can end up with a better plan for the future expan-
sion and growth of the business. On the other hand, the low level of financial literacy
adversely affects the growth of the business (Nunoo and Andoh 2012).
Many previous studies (Hardwick and Adams 2002; Smith, McArdle, and Willis
2010; Yoong 2010; Lusardi and Mitchell 2011) revealed that there is a strong positive
relationship between financial literacy and firm growth. According to the Siekei,
Juma, and Aquilars (2013), financial literacy correlates with the business performance
as it improves the ability of the owner-manager related to the financial aspects of the
business. Study conducted by Bruhn and Zia (2011) on young firms found that the
owners-managers with high financial literacy levels achieved better business perform-
ance and sales. In Bangladesh, most of the owner-manager of small businesses lack
proper education, relevant experiences and financial literacy that results the poor
financial access and management. Choudhury (2014) argued that the promotion of
financial literacy among micro and small business owners in Bangladesh can remove
the obstacle of access to finance for ensuring the sustainable growth of the sector.
Thus, if the owner-manager can gain sufficient amount of financial skills and know-
ledge, it will help them to take proper short and long term decision regarding finan-
cial resources which ultimately gear-up their businesses growth or performance.
Therefore, the study proposes the following hypothesis:
H2: The financial literacy of the owner-manager is significantly positively related to the
financial growth of small business.
It is very common for every country that small businesses largely contribute to the
economy through employment creation and fulfil the needs of local customers by
producing diversified products and services. As a result, it is a great concern for the
governments of any country to emphasis on development of small business sector
with a good number of support programs in order to ensure the economic stability
(Butler 2008). Due to their characteristics of smallness and larger number, small firms
deserve more help from the government sector for developing themselves and subse-
quently to contribute to the economy. Therefore, in many of the countries either
developed or developing, government play a pivotal role for developing the SME sec-
tor (Handoko, Smith, and Burvill 2014).
Many previous studies found the positive relationship between the government
support and the SME growth or performance although some other studies found
insignificant and negative relationship between the two constructs. Studies of Jasra
et al. (2011) in Pakistan; Uddin and Bose (2013) in Bangladesh; Lee, Sohn, and Ju
(2011) in china; Hansen, Rand, and Tarp (2009) in Vietnam; Bah and Cooper (2012)
in Kenya and so forth found the positive relationship between different aspects of
government support and SMEs growth or performance. On the other hand, many
studies confirmed an insignificant relationship (Chen and Parker 2007; Man 2014;
Vixathep 2014). Also there is evidence of a negative relationship (Egena et al. 2014).
In Bangladesh, government and other stakeholders have undertaken various finan-
cial and non-financial support initiatives for the development of small businesses.
Although there are some initiatives available for them, unfortunately most of the
small businesses especially operating in the semi-urban or rural areas are not aware
about these supports or even they know, many of them do not have the proper
access. As a result, they lagged behind the other group who know and get the support
from the government and its agencies. It is expected that if the government design
good policy initiatives with a package of support, provide infrastructures facilities
including access to road, electricity, water, sewerage, and so forth and also ensure the
regulatory, legal, and conducive environment, this variable will enhance the relation-
ship of aforementioned resources and the small firm financial growth. Therefore, the
study hypothesizes following:
H3: Government support significantly enhance the relationship between finance and
small firm financial growth.
H4: Government support significantly enhance the relationship between financial literacy
and small firm financial growth.
5. Methodology
5.1. Research design
Based on the research objectives and hypotheses, the current research adopts the
quantitative method, to examine the relationship between independent and dependent
variables, as well as the moderating effect of an interacting term. To achieve the
research objectives, survey research design was employed and a structured question-
naire was used as the research instrument. A cross-sectional analysis is done as data
has been collected at a specific point in time.
5.2. Sample and data collection

As the study concerns financial growth of small firms, the unit of analysis consists of
small firms operating in Bangladesh. To collect data, interview was conducted
through structured questionnaire among owners or managers where owners are
absent from their businesses operation. To select small firm, the definition of
Bangladesh Bank (the central bank of Bangladesh) has been accepted (provided by
SME Credit Policies & Programmes Department with circular no. 4 in July 2015).
The target populations of the study were the small businesses operating in three
major divisions (Dhaka, Rajshahi, and Chittagong) out of seven divisions
of Bangladesh.
The study considered Krejcie and Morgan (1970) table to determine total sample
size. According to Economic Census 2013 of Bangladesh Bureau of Statistics there are
859,318 small businesses are operating in Bangladesh (Bangladesh Bureau of Statistics
2015). Out of the total number, 598,645 small businesses (70%) are located in three
selected divisions. Hence, based on Krejcie and Morgan table 382 small businesses
were selected as the sample size. However, to reduce the sampling error and to min-
imize the non response rate, the total sample size were multiplied by two (Hair et al.
2008). Therefore, the total 764 questionnaires were administered. As the list of small
enterprises including their addresses except the total number was not available in
Bangladesh, the probabilistic sampling technique cannot be applied. Hence, the study
considered non-probabilistic sampling technique to make the survey manageable but
within reliable limits.
Out of 764 questionnaires, the researcher received 426 questionnaires. From 426
questionnaires researcher found 19 questionnaires unusable and finally used 407
questionnaires for the study. The response rate of this survey was 55.47%, which was
possible due to multiple personal visits to the premises of the small businesses.
5.3. Measures
The study considered both internal and external sources of finance to measure
finance of the small businesses. Shariff and Peou (2008) Conducted a study by using
firm financing as independent variable to test its relationship with SME performance
from the sample of Cambodia. The study adapted 11 items used by them and modi-
fied some items as per the contextual requirement. Two items are deleted and
another two items are added from the study of Federico, Rabetino, and Kantis (2012)
according to expert opinions. The final list of items is shown in Appendix A.
Respondents were asked to anchor this variable on a 5-point Liker scale, which
ranges from 1 ¼ strongly disagree to 5 ¼ strongly agree.
The study defined financial literacy as the combination of knowledge, skills and
the ability of the owner-manager to take important financial decision. The previous
literature of financial literacy showed that no standardised measure is available in
order to measure the financial literacy of owner-manager (Cole and Fernando 2008).
However, the study measured financial literacy by adapting 10 questions from differ-
ent categories which are used in a previous study of Lusardi and Mitchell (2007)
those are evaluated with 10 marks. Appendix B shows the categories of questions that
are used for measuring the financial literacy of the owner-manager of small firms
in Bangladesh.
Government generally provides the financial and non-financial support to the
small business. In Bangladesh, government provides the financial support mostly
through some refinancing schemes of the central bank. Since the study used financial
resources as one of the independent variables, any kind of financial support was
included under ‘finance’ variable. Therefore, the non-financial supports of the govern-
ment were considered to measure the government support variable. Focusing a uni-
dimensional measurement, eight items were used to measure Government support
variable that were adapted from the studies of Yusuf (1995), Hansen, Rand, and Tarp
(2009), Rashid (2012), Abdullah (1999), and Hung et al. (2011). Appendix C shows
the list of items.
The dependent variable of the study is the small business financial growth which
was measured through four growth indicators such as sales, profits, total asset size,
and additional capital and adopted from Wickham (2006). Respondents were asked
to anchor these two variables on a 5-point Likert scale, which ranges from
1 ¼ strongly disagree to 5 ¼ strongly agree.
5.4. Data analysis techniques

The study used both descriptive and inferential statistics to analyse data. For data
analysis and other hypotheses testing, different inferential statistical techniques are
used. For the purpose of data preparation and analysis, the study considered SPSS
version 22 and Structural Equation Modeling (SEM). SEM is considered as a multi-
variate technique that combines the aspects of multiple regression as well as factor
analysis to assess a series of interconnected dependence relationships simultaneously
(Hair et al. 2010). SEM can also assess the reliability, validity and the uni-dimension-
ality of each individual construct (Hair et al. 2006).
Out of two different types of SEM (CB-SEM and PLS-SEM), the study considered
PLS-SEM for data analysis. There are two step processes for estimating and interpreting
PLS model which are the assessment of measurement model and the structural model
(Hair, Ringle, and Sarstedt 2011). The measurement model can be evaluated through
convergent validity and discriminant validity (Henseler, Ringle, and Sinkovics 2009;
Hair, Ringle, and Sarstedt 2011). The indicator reliability, average variance extracted
(AVE) and composite reliability (CR) for convergent validity and Fornell–Larcker criter-
ion and/or cross loadings for discriminant validity. To evaluate the structural model, the
coefficient of determination (R2) as well as the level of significance of the path coeffi-
cients, standard error, t-value and p-value are considered as the main evaluation criteria
(Henseler, Ringle, and Sinkovics 2009; Hair, Ringle, and Sarstedt 2011). This is done
through the bootstrapping procedure in SmartPLS 3 for both the main effect model and
the moderating effect. The study used 1000 re-sampling for bootstrapping to test the sig-
nificance of the regression coefficients. To test the interaction effects of moderators, the
study used product indicator approach. In this approach, interaction term is derived by
the multiplication of each item belong to endogenous variable and each item belong to
moderating variable (Wilson 2010).
6. Results
6.1. Respondent profile
The unit of analysis of this study was small firm and the respondents were owners or
the managers where owners are absent from their businesses operation. The survey
findings on the respondents profile are summarised in Table 1. About 70% of the
total respondents were the owners and the rest 30% were managers. Almost all the
respondents (96.56%) were male except 3.44% of female. Around 41% of the respond-
ents completed Higher Secondary Certificates (HSC) followed by 31.70% in bachelor
degree. The level of education for secondary or less was around 20%. A small portion
(around 6%) of respondents completed the postgraduate degree and the respondents
having diploma was very negligible (1.72%).
The majority of business had low business experience in terms of their age.
Around 60% of sample firms were less than 10 years old and 40% were more than
10 years. The survey results showed that more than half (58.72%) of the sample firms
were trading concern, 22.36% were service oriented firms and only 18.92% were man-
ufacturing firms. According to the survey results, the lion portion (around 87%) of
the sample firms were in between BDT 0.5 and 10 million in terms of asset without
land and building and rest of them has over BDT 10 million. In terms of number of
employees, the majority (around 67%) of the businesses had less than 10 employees.
The majority of the respondents (around 60%) were form urban areas, 23.83% from
the rural areas and only 16.46% of them from the semi-urban areas (Table 1).
6.2. Common method bias

The study used a cross sectional survey method that indicates all kinds of data was
collected from a single respondent within a firm which may create the problem of
Table 1. Respondents profile.

Demographics Frequency (N ¼ 407) Percentage
Position in Business
Owner 283 69.53
Manager 124 30.47
Gender
Male 393 96.56
Female 14 3.44
Level of Education
Secondary or less 81 19.90
HSC 166 40.79
Diploma 7 1.72
Bachelor 129 31.70
Postgraduate 24 5.90
Age of business
3–10 years 243 59.71
11–18 years 116 28.50
19–26 years 38 9.34
27–34 years 9 2.21
35 years and more 1 0.25
Type of business
Manufacturing 77 18.92
Trading 239 58.72
Service 91 22.36
Size of business (BDT)
(Total fixed asset without land and Building)
0.5 million–10 million 354 86.98
10 million–20 million 19 4.67
40 million and above 11 2.70
Number of employees
3–10 271 66.58
11–20 65 15.97
21–30 37 9.09
31–40 15 3.69
41 and above 19 4.67
Location of business
Rural 97 23.83
Urban 243 59.71
Semi-urban 67 16.46
common method bias (Podsakoff et al. 2003). The study performed Harman’s single
factor test to identify the potential problem. For this purpose, an un-rotated factor
analysis was conducted for all measurement items that extracted four factors with
eigenvalues equal to one. The total four factors contribute 63.124% of the total vari-
ance. The first factor accounted for 24.313% of the variance. Therefore, it is con-
cluded that the common method bias is not the major concern for this research.
6.3. Measurement model evaluation

According to Hair, Ringle, and Sarstedt (2011), reflective measurement model should
be evaluated through interpreting their reliability and validity. Therefore, the meas-
urement model is assessed through convergent and discriminant validity (Chin 2010).
Convergent validity is assessed by using factor loadings, AVE and CR (Hair et al.
2010). For items loading, the study considered minimum loading value of 0.6 as rec-
ommended by Chin (1998). All the loadings were more than 0.6. The cut-off value
for AVE should at least 0.5 and higher that indicates a satisfactory convergent validity
(Henseler, Ringle, and Sinkovics 2009; Hair et al. 2014). The convergent validity in
terms of AVE shows the satisfactory result as all the constructs have more that 0.5 of
minimum threshold. The study found CR higher than the recommended value of 0.7
(Hair et al. 2014) for all the constructs. Finally, it can be said that the measurement
model satisfied all the requirements of convergent validity that is shown in Table 2
and Figure 2.
Table 2. Convergent validity.

Construct Item type Item Loadings AVE CR
Finance Reflective FIN1 0.746 0.510 0.920
FIN2 0.635
FIN3 0.695
FIN4 0.661
FIN5 0.734
FIN6 0.707
FIN7 0.710
FIN8 0.702
FIN9 0.735
FIN10 0.746
FIN11 0.775
Financial Literacy Reflective FINLIT 1.000 1.00 1.00
Government Support Reflective GS1 0.820 0.607 0.925
GS2 0.780
GS3 0.783
GS4 0.680
GS5 0.868
GS6 0.745
GS7 0.828
GS8 0.712
Small firm financial growth Reflective SFFG1 0.772 0.582 0.847
SFFG2 0.781
SFFG3 0.798
SFFG4 0.697
Figure 2. Measurement model.

Discriminant validity is estimated to examine the differences between two concep-

tually different concepts (Henseler, Ringle, and Sinkovics 2009). Fornell–Larcker cri-
terion has been put forwarded in order to assess discriminant validity (Hair et al.
2013). According to Fornell and Larcker (1981) criterion, the correlations between
constructs should be compared with the square root of the AVE for that constructs
and all the diagonal value of the constructs must be greater than the corresponding
off-diagonal constructs (Chin 2010). The results of the discriminant validity which is
exhibited in Table 3 revealed that all the diagonal values of the constructs were
greater than the corresponding off-diagonal constructs. Therefore, the results signify
the adequate discriminant validity of the measurement model.
6.4. Structural model evaluation

The coefficient of determination (R2), beta as well as the level of significance (t-val-
ues) of the path coefficients are the main evaluation criteria for assessing structural
model (Hair et al. 2014). The study used 1000 re-sampling for bootstrapping proced-
ure to estimate the statistical significance of the path coefficient (Hayes 2009). Beside
the basic measures, the study also reported the predictive relevance (Q2) and the
effect size (f2) as suggested by Hair et al. (2014) and Soto-Acosta, Popa, and Palacios-
Marques (2015).
The R2 of the financial growth was found 0.250 that is substantial as recommended
by Cohen (1988). The value of R2 indicates that 25% of the variance in financial
growth is explained by the two independent variables (finance and financial literacy
of owner-manager). The study found that both finance (b ¼ 0.154, p < 0.01) and
financial literacy (b ¼ 0.471, p < 0.01) have significant positive relationship with finan-
cial growth of small firm. Therefore, hypotheses H1 and H2 were supported that
summarizes in Table 4.
The study also assessed effect size (f2) to show the substantive significance. The
statistical significance like a p value can only shows whether an effect exists and does
not reveal the size of the effect and thus in reporting and interpreting results, both
the substantive significance (effect size) and statistical significance (p value) are essen-
tial (Sullivan and Feinn 2012). Cohen (1988) provided the guideline for measuring
the magnitude of the effect size and suggested that 0.02, 0.15, and 0.35 represent
Table 3. Discriminant validity of measurement model.

FIN FINL GS SFFG
FIN 0.714
FINL 0.032 Single item
GS 0.022 0.002 0.779
SFFG 0.169 0.476 0.062 0.763
Table 4. Structural model.

Hypothesis Relationship Std Beta Std Error t-value Decision R2 f2 Q2
H1 FIN -> SFFG 0.154 0.037 4.200 Supported 0.032
H2 FINL -> SFFG 0.471 0.033 14.343 Supported 0.250 0.296 0.141
p < 0.01.
FIN ¼ Finance, FINL ¼ Financial literacy, SFFG ¼ Small firm financial growth.
Table 5. Moderating effect of government support.

Hypothesis Interaction effect Std. Beta Std. Error t-value Decision
H3 FINGS -> SFFG 0.154 0.109 1.418 Not supported
H4 FINLGS -> SFFG 0.077 0.040 1.905 Not supported
FIN ¼ Finance, FINL ¼ Financial literacy, GS ¼ Government support, SFFG ¼ Small firm financial growth.
small, medium and large effects sizes, respectively. According to this guideline, both
the relationships showed (Table 4) substantive impact. However, finance showed
small effect and financial literacy showed moderate effect.
Further, the study also accessed the predictive relevance (Q2) that regarded as an
additional assessment of model fit (Duarte and Raposo 2010). This assessment is per-
formed by using the blindfolding procedure. According to Hair et al. (2014), blind-
folding procedure should apply only for endogenous constructs that have a reflective
measurement. For the Blindfolding setting, the study used omission distance (OD) of
7 as suggested by Hair et al. (2012). The value of Q2 greater than zero (0) indicates
that the model has predictive relevance for a specific endogenous construct whereas
the value of Q2 lower than zero denotes lack of predictive relevance (Hair et al.
2014). Thus, the result (Table 3) of Q2 0.141 with financial growth indicates that the
model has sufficient predictive relevance (Table 4).
6.5. Moderating effect

For the interaction effect of moderator, the study used product indicator approach as
both the endogenous (small firm financial growth) and moderator variables
(Government support) are continuous variable. To test the significance of the inter-
action effect, the study used 1000 bootstrapping re-sampling. The overall results
showed that the hypotheses for two interaction effects of government support with
financial growth were not supported. Table 5 summaries the results of the moderat-
ing effect of government support.
The interaction effect of government support with finance and financial growth
(b¼ 0.154, t ¼ 1.418) and financial literacy and financial growth (b¼ 0.077,
t ¼ 1.905), were not significant as the t values were all below the minimum cut-off
value of 1.96. Therefore, the hypotheses of H3 and H4 were not supported. Both the
hypotheses assumed that the relationships between the independent and dependent
variables would be higher when small firms receive government support. However,
the results revealed that government support reduce their positive associations which
opposed the hypotheses direction.
7. Discussion and conclusion

The main intent of the study is to explore the impact of finance and financial literacy
of owner-manager on the financial growth of small firm. Besides, based on the previ-
ous literature, the study also expected that government support supposed to enhance
the relationships between these resources and financial growth of small firm. In order
to achieve such goals, the study conducted a quantitative research to confirm and test
the hypothesized relationships using sample from owner-managers of small firms
operating in Bangladesh. There is a common statement that all the firms either big or
small use various kinds of internal and external resources for its operations in order
to generate growth and survival. The study examined the relationship between
finance, financial literacy and small firm financial growth through the structural
model. The results revealed that finance has significant positive relationship with
financial growth of small firms in Bangladesh. This finding is consistent with the
arguments of theory of RBV (Barney 1991).
A vast majority of the previous studies (Ayyagari, Demirg€ uç-Kunt, and
Maksimovic 2008; Franco and Haase 2010; Ahmed and Hamid 2011; Rahaman 2011;
Yazdanfar 2012; Raravi, Bagodi, and Mench 2013; Islam, Yousuf, and Rahman 2014)
in different contexts also found that finance is significantly positively correlated with
small firm growth. Access to finance facilitates small businesses to enter into the mar-
ket, to generate expansion, reduce the riskiness of the firms, and help innovation and
to capture opportunities for future growth. From the start-up to the maturity, in all
stages firms need financial resources in order to generate other resources to facilitate
growth. Small firm generally start business with their own savings or other financial
help from friends and relatives. But when they require additional funds for financing
the growth they rely on the external sources for accelerating that growth prospects.
Consequently, lack of required capital may result the small firms to fail to generate
their expected growth in terms of sales, assets, additional capital or profit.
The study found a very strong positive relationship with financial literacy and small
firm financial growth in Bangladesh. A good number of previous studies (Smith,
McArdle, and Willis 2010; Lusardi and Mitchell 2011; Ganyaupfu 2013; Peters et al. 2014)
also revealed the similar associations between financial literacy and financial outcomes of
firms in different context. The owner-managers are the important resources for the small
firm who make plan, use other resources and take all kinds of decisions including the
financial and investment decision as well as carry out the functional activities of their
business; all of which ultimately affect their financial growth. In order to manage the
financial activities, proper investment and dealing with the external financial environment,
financial literacy of the owner-manager is the precondition.
The study used government support as the moderating variable. The interaction effect
of government support with finance, financial literacy and financial growth were found
insignificant. This means that government support is not able to enhance the relationship
between finance, financial literacy and small firm growth in Bangladesh. The results found
in the study contradict with the standpoint of earlier researchers and scholars. The study
argues that the government support may not play its intended role if the support is not
disseminated in a proper way. This is not surprising since one of the recent studies
(Szczygielski et al. 2017), in the context of Turkey and Poland, have revealed that
inappropriate institutional framework of government support may in effect be inefficient,
or worse, impede the upgrading of physical and human capital.
7.1. Theoretical implications

There is no direct theory related to the small firm’s growth and the factors affecting
their growth. In their research, Dobbs and Hamilton (2007) and Omar, Lim, and
Basiruddin (2014) reveal that there is no unified theory presently available related to
small firms’ growth and also it is remain in the outside of the reach of scholars.
Although there is no unified theory to be contributed, but the theory of RBV is more
relevant in this context. The study in the field of SME and finance literature employ-
ing the RBV is very narrow (Lockett and Thompson 2001) with some exceptions.
Mac An Bhaird (2010) strongly supports more empirical and theoretical studies in
SME research employing the RBV to address the paucity of studies especially in the
field of economics and finance literature. Current study contributes to the RBV the-
ory in the context of manufacturing, trading and service sector of developing coun-
tries like Bangladesh. The study also considered government support as the
moderator between the resources and small firm growth and end up with the argu-
ment that government support does not play the role between these relationships.
This study extends the theory of RBV by including a quality dimension, more specif-
ically the quality of financial literacy, which is the owner-manager resource that con-
tributes to effective management of the firm financial resources and end up with a
better plan for the future expansion and growth of the business. This study also indi-
cates that government support does not play its role in such context, which is, argu-
ably, due to the weakness of the framework of the government support distribution.
7.2. Practical implications

There are many stakeholders who are actively involved with the sectors for different
purposes and be benefited from the current research output. The Government and its
related departments those are working for the betterment of the sector can take the
lessons for their future course of action. Since there is no such research exists using
these resources into a frame with the growth of small business segment, the stake-
holders will have at least the idea, from the large sample, about the nature and degree
of impact on small business growth as well as how these resources affect growth. The
financial institutions or any other lenders who want to lend money in the small busi-
ness segment can have the idea about the firms’ growth and the influence of resour-
ces on growth that may help them in their credit appraisal decision. Besides, the
practitioners including the researchers and policy makers can easily use the research
output for further research as well as for designing policy initiatives. In addition to
that from the current research output small business owner/manager will have the
lessons those may be adopted for designing their future business plan or may be used
as the early warning signal. Moreover, as per the financial literacy is concerned, the
government bodies, private organizations providing business development support,
policy makers, and practitioners will have the idea about the most critical problems
which must be addressed before launching any knowledge and skill development pro-
grams to enhance their financial literacy.
7.3. Limitations and future research directions

In this research, only two important resources, finance and financial literacy are used
which cannot generalize the impact of resources on small firm growth. Thus, more
resources, both tangible and intangible, may include in a model to study in future.
Like government, many NGOs and private organizations also work for small business
development, Therefore, further research can be done by using such variables as
moderator. The study considered only the financial growth of small business although
the non-financial growth measure is also important. Hence, further research can be
done to see the impact of finance and financial literacy on the non-financial growth
of small firm.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes on contributors
Dr. Md. Mosharref Hossain is an Assistant Professor of Bangladesh Institute of Bank
Management (BIBM), where he serves as a trainer of banking community, teacher, researcher
and consultant since August, 2007. His areas of interest include credit appraisal and manage-
ment, entrepreneurship development and SME banking, financial analysis for executives of
banks and other financial institutions, micro and small enterprise financing, etc.
Dr. Yusnidah Ibrahim is a Professor of Finance in the School of Economics, Finance and
Banking, Universiti Utara Malaysia (UUM). Her research and publications are in the area of
capital structure, dividend policy, Islamic bonds (Sukuk), small business finance and higher
education finance. She has also undertaken consultation work on Private Financial Initiative
(PFI) models, small business financial planning and higher education funding. In terms of pro-
fessional involvement, she possesses the Registered Financial Planner (RFP) designation and
Certificate in Risk Management (CFM). She also serves as the editorial board member of the
International Journal of Banking and Finance (IJBF) and International Journal of Management
Studies (IJMS). Currently she is the Assistant Vice Chancellor of College of Business and the
Dean of the School of Economics, Finance and Banking (SEFB), at UUM.
Dr. Md Mohan Uddin is an Associate Professor of Finance in the School of Business &
Economics, United International University, Dhaka, Bangladesh. He teaches corporate finance,
portfolio management, investment analysis, financial statement analysis and managerial
finance. He is also involved in online teaching of finance courses at University of Roehampton
London Online. His areas of interest include corporate finance, small business finance, finan-
cial stress, capital market, corporate governance, and higher education.
References
Abdullah, S. H. 1999. Management in Malaysia: A Basic Text on General Management with
Local References to Management a Malaysian Business. Kuala Lumpur: Malaysian Institute
of Management.
Achtenhagen, L., L. Naldi, and L. Melin. 2010. “Business Growth—Do Practitioners and
Scholars Really Talk about the Same Thing?” Entrepreneurship Theory and Practice 34 (2):
289–316.
Ahamad, M., E. Ahamad, M. B. H. Kahut, and G. Murtaza. 2012. “New Determination of
Factors Affecting the Growth of Small and Medium Sized Enterprises in Pakistan.”
Interdisciplinary Journal of Contemporary Research in Business 4 (6): 513–530.
Ahmed, Hamna, and Naved Hamid. 2011. “Financing Constraints: Determinants and
Implications for Firm Growth in Pakistan.” The Lahore Journal of Economics 16 (Special
Edition): 317–346.
Ahmed, M. U. 2004. “Promoting Business and Technological Incubation for Improved

Competitiveness of Small and Medium-Sized Industries through Application of Modern and
Efficient Technologies in Bangladesh.” In General Economics Division, Planning
Commission, Dhaka, Bangladesh.
Akterujjaman, S. M. 1970. “Problems and Prospects of SMEs Loan Management: A Study on
Mercantile Bank Limited, Khulna Branch.” Journal of Business and Technology (Dhaka) 5
(2): 38–52.
Alam, Md Shamsul, and Md Anwar Ullah. 2006. “SMEs in Bangladesh and Their Financing:
An Analysis and Some Recommendations.” The Cost and Management 34 (3): 57–72.
Alo, Jebun Nesa. 2014. “SME Credit Grows 18% in 2013.” Dhaka Tribune, Februry 7.
Aragon-Correa, J. A., and S. Sharma. 2003. “A Contingent Resource-Based View of Proactive
Corporate Environmental Strategy.” Academy of Management Review 28 (1): 71–88.
Ayyagari, M., A. Demirg€ uç-Kunt, and V. Maksimovic. 2007. “Firm Innovation in Emerging
Markets: The Roles of Governance and Finance.” World Bank Policy Research Working
Paper (4157).
Ayyagari, Meghana, Asli Demirg€ uç-Kunt, and Vojislav Maksimovic. 2008. “How Important
Are Financing Constraints? The Role of Finance in the Business Environment.” The World
Bank Economic Review 22 (3): 483–516.
Bah, El-hadj M., and Geoff Cooper. 2012. Constraints to the Growth of Small Firms in
Northern Myanmar. University of Auckland. http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/
10086/25482/1/DP577.pdf
Bangladesh Bureau of Statistics. 2015. Report on Economic Census 2013, Dhaka, Bangladesh.
Barney, Jay. 1991. “Firm Resources and Sustained Competitive Advantage.” Journal of
Management 17 (1): 99–120.
Baron, R. M., and D. A. Kenny. 1986. “The Moderator–Mediator Variable Distinction in
Social Psychological Research: Conceptual, Strategic, and Statistical Considerations.” Journal
of Personality and Social Psychology 51 (6): 1173–1182.
Barringer, Bruce R., Foard F. Jones, and Donald O. Neubaum. 2005. “A Quantitative Content
Analysis of the Characteristics of Rapid-Growth Firms and Their Founders.” Journal of
Business Venturing 20 (5): 663–687.
Baum, J. Robert, and Edwin A. Locke. 2004. “The Relationship of Entrepreneurial Traits, Skill,
and Motivation to Subsequent Venture Growth.” The Journal of Applied Psychology 89 (4):
587–598.
Beck, Thorsten, Aslı Demirg€ uç-Kunt, Luc Laeven, and Vojislav Maksimovic. 2006. “The
Determinants of Financing Obstacles.” Journal of International Money and Finance 25 (6):
932–952.
Beck, Thorsten, Asli Demirguc-Kunt, and Maria Soledad Martinez Peria. 2007. “Reaching out:
Access to and Use of Banking Services across Countries.” Journal of Financial Economics 85
(1): 234–266.
Beck, Thorsten, A. S. L. I. Demirg€ uç-Kunt, and Vojislav Maksimovic. 2005. “Financial and
Legal Constraints to Growth: Does Firm Size Matter?” The Journal of Finance 60 (1):
137–177.
Berger, Allen N., and Gregory F. Udell. 1998. “The Economics of Small Business Finance: The
Roles of Private Equity and Debt Markets in the Financial Growth Cycle.” Journal of
Banking & Finance 22 (6): 613–673.
Bruhn, Miriam, and Bilal Zia. 2011. “Stimulating Managerial Capital in Emerging Markets:
The Impact of Business and Financial Literacy for Young Entrepreneurs.” World Bank
Policy Research Working Paper Series No. 5642.
Butler, Brett J. 2008. "Family forest owners of the United States, 2006." Gen. Tech. Rep. NRS-
27. Newtown Square, PA: US Department of Agriculture, Forest Service, Northern Research
Station 73.
Carpenter, Robert E., and Bruce C. Petersen. 2002. “Is the Growth of Small Firms Constrained
by Internal Finance?" Review of Economics and Statistics 84 (2): 298–309.
Cassar, Gavin, and Scott Holmes. 2003. “Capital Structure and Financing of SMEs: Australian
Evidence.” Accounting and Finance 43 (2): 123–147.
Chen, John, and David Parker. 2007. “Taiwan’s Textile and Clothing SME Response to
Globalization.” Journal of Asia-Pacific Business 8 (2): 89–111.
Chen, Kwo-Shin, Emerson M. Babb, and Lee F. Schrader. 1985. “Growth of Large Cooperative
and Proprietary Firms in the US Food Sector.” Agribusiness 1 (2): 201–210.
Chin, W. W. 2010. Handbook of Partial Least Squares, 655–690. Berlin: Springer.
Chin, Wynne W. 1998. “The Partial Least Squares Approach to Structural Equation
Modeling.” Modern Methods for Business Research 295 (2): 295–336.
Chittenden, Francis, Graham Hall, and Patrick Hutchinson. 1996. “Small Firm Growth, Access
to Capital Markets and Financial Structure: Review of Issues and an Empirical
Investigation.” Small Business Economics 8 (1): 59–67.
Choudhury, T., and Ananya Raihan. 2000. Structural Adjustment Participatory Review
Initiative. Bangladesh Study Theme 2 (C): Implications of Financial Sector Reforms (Mimeo).
Dhaka: The World Bank, Government of Bangladesh and Civil Society.
Choudhury, T. A. 2014. “Bangladesh Country Paper on: Impact of Access to Financial
Services.” United Nations Conference on Trade and Development. Switzerland.
Chowdhury, F. 2007a. “Customized Form of Finance for SMEs.” Paper Presented at the
Seminar Proceedings, National SME Development Program for OIC Member Countries,
FBCCI, Dhaka.
Chowdhury, M. S. 2007b. “Overcoming Entrepreneurship Development Constraints: The Case
of Bangladesh.” Journal of Enterprising Communities: People and Places in the Global
Economy 1 (3): 240–251.
Chowdhury, Md Shahnur Azad, Md Kazi Golam Azam, and Serajul Islam. 2015. “Problems
and Prospects of SME Financing in Bangladesh.” Asian Business Review 2 (2): 51–58.
Chowdhury, Tanbir Ahmed, and Kashfia Ahmed. 2011. “An Appraisal of the Problems and
Prospects of Small and Medium Enterprises (SMEs) Financing in Bangladesh: A Study on
Selected Districts.” EWUCRT Working Paper 4, Dhaka, Bangladesh.
Christelis, Dimitris, Tullio Jappelli, and Mario Padula. 2010. “Cognitive Abilities and Portfolio
Choice.” European Economic Review 54 (1): 18–38.
Churchill, N. C., and J. W. Mullins. 2001. “How Fast Can Your Company Afford to Grow.”
Harvard Business Review 79 (5): 135–142.
Cohen, J. 1988. Statistical Power Analysis for the Behavioral Sciencies. Hillsdale, NJ: Erlbaum.
Cole, S., T. Sampson, and B. Zia. 2009. "Financial literacy, financial decisions, and the demand
for financial services: Evidence from India and Indonesia, Harvard Business School."
Working Paper 09-117.
Cole, Shawn, and Nilesh Fernando. 2008. “Assessing the Importance of Financial Literacy.”
ADB Finance for the Poor 9 (2): 1–6.
Cook, Paul. 2001. “Finance and Small and Medium-Sized Enterprise in Developing Countries.”
Journal of Developmental Entrepreneurship 6 (1): 17–40.
Conner, K. R., and C. K. Prahalad. 1996. “A Resource-Based Theory of the Firm: Knowledge
versus Opportunism.” Organization Science 7 (5): 477–501.
Davidsson, P., F. Delmar, and J. Wiklund. 2006. “Entrepreneurship as Growth; Growth as
Entrepreneurship.” Entrepreneurship and the Growth of Firms, 21–38. Cheltenham: Edward
Elgar Publishing.
Delberg. 2011. "Report on support for SMEs in developing countries through financial inter-
vention", Accessed 21 July 2014. http://www.eib.org/attachments/dalberg_sme-briefing-paper.
pdf
Delmar, F. 2006. “Measuring Growth: Methodological Considerations and Empirical Results.”
Entrepreneurship and the Growth of Firms 1 (1): 62–84.
Delmar, Frederic, Per Davidsson, and William B. Gartner. 2003. “Arriving at the High-Growth
Firm.” Journal of Business Venturing 18 (2): 189–216.
Dobbs, Matthew, and R. T. Hamilton. 2007. “Small Business Growth: Recent Evidence and
New Directions.” International Journal of Entrepreneurial Behavior & Research 13 (5):
296–322.
Duarte, Paulo Alexandre O., and Mario Lino B. Raposo. 2010. “A PLS Model to Study Brand
Preference: An Application to the Mobile Phone Market.” In Handbook of Partial Least
Squares, 449–485. Berlin: Springer.
Egena, O., W. D. Ngovenda, E. E. Theresa, and M. N. Bridget. 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.
Federico, Juan, Rodrigo Rabetino, and Hugo Kantis. 2012. “Comparing Young SMEs’ Growth
Determinants across Regions.” Journal of Small Business and Enterprise Development 19 (4):
575–588.
Fornell, Claes, and David F. Larcker. 1981. “Evaluating Structural Equation Models with
Unobservable Variables and Measurement Error.” Journal of Marketing Research 18 (1):
39–50.
Franco, Mario, and Heiko Haase. 2010. “Failure Factors in Small and Medium-Sized
Enterprises: qualitative Study from an Attributional Perspective.” International
Entrepreneurship and Management Journal 6 (4): 503–521.
Galindo, Arturo J., and Fabio Schiantarelli. 2003. Credit Constraints and Investment in Latin
America. Washington, DC: IDB.
Ganyaupfu, E. M. 2013. “Entrepreneur and Firm Characteristics Affecting Success of Small
and Medium Enterprises (SMEs) in Gauteng Province.” International Journal of Innovative
Research in Management 2 (9): 1–8.
Gavigan, Karen. 2010. “Show Me the Money Resources: Financial Literacy for 21st Century
Learners.” Library Media Connection 28 (5): 24–27.
Gibb, A., and L. Davies. 1990. “In Pursuit of Frameworks for the Development of Growth
Models of the Small Business.” International Small Business Journal: Researching
Entrepreneurship 9 (1): 15–31.
Gottschalk, P. 2007. Business Dynamics in Information Technology. Hershey, PA: IGI Global.
Gupta, Priya Dhamija, Samapti Guha, and Shiva Subramanian Krishnaswami. 2013. “Firm
Growth and Its Determinants.” Journal of Innovation and Entrepreneurship 2 (1): 15–14.
Haider, M. Badrul, and T. Akhter. 2014. “Small and Medium Enterprises Financing in
Bangladesh: The Missing Middle.” International Journal of Management and Business
Research 4 (4): 295–308.
Hair, J. F., W. C. Black, B. J Babin, and R. E. Anderson 2010. Multivariate Data Analysis.
Upper Saddle River: NJ: Pearson Printice Hall.
Hair, J. F., W. C. Black, B. J. Babin, R. E. Anderson, and R. L. Tatham. 2006. Multivariate
Data Analysis (Vol. 6). Upper Saddle River, NJ: Pearson Prentice Hall.
Hair, Joe F., Christian M. Ringle, and Marko Sarstedt. 2011. “PLS-SEM: Indeed a Silver
Bullet.” Journal of Marketing Theory and Practice 19 (2): 139–152.
Hair, Joe F., Marko Sarstedt, Christian M. Ringle, and Jeannette A. Mena. 2012. “An
Assessment of the Use of Partial Least Squares Structural Equation Modeling in Marketing
Research.” Journal of the Academy of Marketing Science 40 (3): 414–433.
Hair, Joseph F., G. Tomas, M. Hult, Christian Ringle, and Marko Sarstedt. 2013. A Primer on
Partial Least Squares Structural Equation Modeling (PLS-SEM). California: Sage Publications,
Incorporated.
Hair, Joseph F., Mary F. Wolfinbarger, David J. Ortinau, and Robert P. Bush. 2008. Essentials
of Marketing Research. Boston: McGraw-Hill/Higher Education.
Hair, Joseph F., G. Jr Tomas, M. Hult, Christian Ringle, and Marko Sarstedt. 2014. A Primer
on Partial Least Squares Structural Equation Modeling (PLS-SEM). Los Angeles: Sage
Publications.
Hall, Graham C., Patrick J. Hutchinson, and Nicos Michaelas. 2004. “Determinants of the
Capital Structures of European SMEs.” Journal of Business Finance & Accounting 31 (5–6):
711–728.
Handoko, Fourry, Alan Smith, and Colin Burvill. 2014. “The Role of Government,
Universities, and Businesses in Advancing Technology for SMEs’ Innovativeness.” Journal of
Chinese Economic and Business Studies 12 (2): 171–180.
Hansen, Henrik, John Rand, and Finn Tarp. 2009. “Enterprise Growth and Survival in
Vietnam: Does Government Support Matter?” The Journal of Development Studies 45 (7):
1048–1069.
Hardwick, Philip, and Mike Adams. 2002. “Firm Size and Growth in the United Kingdom Life
Insurance Industry.” Journal of Risk & Insurance 69 (4): 577–593.
Hayes, Andrew F. 2009. “Beyond Baron and Kenny: Statistical Mediation Analysis in the New
Millennium.” Communication Monographs 76 (4): 408–420.
Henseler, J€org, Christian M. Ringle, and Rudolf R. Sinkovics. 2009. “The Use of Partial Least
Squares Path Modeling in International Marketing.” Advances in International Marketing 20
(1): 277–319.
Hung, Daisy Kee Mui., Azura Abdullah Effendi, Lilis Suriety Abdul Talib, and Noor Afiza
Binti Abdul Rani. 2011. “A Preliminary Study of Top SMEs in Malaysia: Key Success Factor
vs Government Support Program.” Journal of Global Business and Economics 2 (1):48–58.
Huston, Sandra J. 2010. “Measuring Financial Literacy.” Journal of Consumer Affairs 44 (2):
296–316.
Islam, Md Ariful, Salahuddin Yousuf, and Md Imtiaj Rahman. 2014. “SME Financing in
Bangladesh: A Comparative Analysis of Conventional and Islamic Banks.” Journal of Islamic
Banking and Finance 2 (1): 79–92.
Jasra, Javed Mahmood, Muhammad Asif Khan, Ahmed Imran Hunjra, Aziz Ur Rehman, and
Rauf I. Azam. 2011. “Determinants of Business Success of Small and Medium Enterprises.”
International Journal of Business and Social Science 2 (20): 274–280.
Kamunge, M. S., A. Njeru, and O. I. Tirimba. 2014. “Factors Affecting the Performance of
Small and Micro Enterprises in Limuru Town Market of Kiambu County, Kenya.”
International Journal of Scientific and Research Publications 4 (12): 1–19.
Kelliher, F., and L. Reinl. 2009. “A Resource-Based View of Micro-Firm Management
Practice.” Journal of Small Business and Enterprise Development 16 (3): 521–532.
Khan, Jahangir H., Abdul Kader Nazmul, Md Farooque Hossain, and Munsura Rahmatullah.
2012. “Perception of SME Growth Constraints in Bangladesh: An Empirical Examination
from Institutional Perspective.” European Journal of Business and Management 4 (7):
256–272.
Krejcie, Robert V., and Daryle W. Morgan. 1970. “Determining Sample Size for Research
Activities.” Educational and Psychological Measurement 30 (3): 607–610.
Kumar, Anjali, and Manuela Francisco. 2005. Enterprise Size, Financing Patterns, and Credit
Constraints in Brazil: Analysis of Data from the Investment Climate Assessment Survey. Vol.
6. Washington, DC: World Bank Publications.
Lee, Jong Ha., So Young Sohn, and Yong Han Ju. 2011. “How Effective is Government
Support for Korean Women Entrepreneurs in Small and Medium Enterprises?” Journal of
Small Business Management 49 (4): 599–616.
Lockett, Andy, and Steve Thompson. 2001. “The Resource-Based View and Economics.”
Journal of Management 27 (6): 723–754.
Lusardi, Annamaria, and Olivia S. Mitchell. 2007. "Financial literacy and retirement planning:
New evidence from the Rand American Life Panel." Michigan Retirement Research Center
Research Paper No. WP 157.
Lusardi, Annamaria, and Olivia S. Mitchell. 2011. Financial Literacy and Planning:
Implications for Retirement Wellbeing." Working Paper, National Bureau of Economic
Research.
Lusardi, Annamaria, and Peter Tufano. 2009. Debt Literacy, Financial Experiences, and
Overindebtedness." Working Paper, National Bureau of Economic Research.
L€utkenhorst, Wilfried. 2006. “Private Sector Development: The Support Programmes of the
Small and Medium Enterprises Branch.” Working Paper, UNIDO.
Mac An Bhaird, Ciaran. 2010. Resourcing Small and Medium Sized Enterprises: A Financial
Growth Life Cycle Approach. Heidelberg: Springer.
Malo, Stephane, and Jesper Norus. 2009. “Growth Dynamics of Dedicated Biotechnology
Firms in Transition Economies. Evidence from the Baltic Countries and Poland.”
Entrepreneurship & Regional Development 21 (5–6): 481–502.
Mambula, Charles. 2002. “Perceptions of SME Growth Constraints in Nigeria.” Journal of
Small Business Management 40 (1): 58–65.
Mamun, A. A., M. M. Hossain, and A. N. K. Mizan. 2013. SME Financing: Demand Side
Problems and Supply Side Responses. Dhaka: BIBM.
Man, Mandy Mok Kim. 2014. “Government Incentives and Export Performance of Malaysian
Small and Medium-Sized Enterprises.” Comprehensive Research Journal of Management and
Business Studies 2 (4): 84–91.
Miller, Margaret, Nicholas Godfrey, Bruno Levesque, and Evelyn Stark. 2009. "The Case for Financial
Literacy in Developing Countries: Promoting Access to Finance by Empowering Consumers."
World Bank, DFID, OECD e CGAP, http://www.oecd.org/dataoecd/35/32/43245359.pdf.
Musso, Patrick, and Stefano Schiavo. 2008. “The Impact of Financial Constraints on Firm
Survival and Growth.” Journal of Evolutionary Economics 18 (2): 135–149.
Nunoo, Jacob and Francis K. Andoh. 2012. “Sustaining Small and Medium Enterprises through
Financial Service Utilization: Does Financial Literacy Matter?” Paper presented at the
Annual Meeting.
Olaore, Rafiu Akinpelu. 2014. “Challenges in Managing Entrepreneurial Small Firm’s Growth
and Transition in Nigeria.” Historical Research Letter 9: 13–17.
Omar, Rosmini, Kim Yew Lim, and Rohaida Basiruddin. 2014. “Board of Directors and Small
Medium Enterprise’s Firm Growth with Firm Culture as Moderating Factor in Malaysia.”
Procedia - Social and Behavioral Sciences 164: 315–323.
Ou, Charles, and George W. Haynes. 2006. “Acquisition of Additional Equity Capital by Small
Firms–Findings from the National Survey of Small Business Finances.” Small Business
Economics 27 (2–3): 157–168.
Peters, Ricardo Martin, Garth van Gensen, Eslyn Bleighnaul Hugh Isaacs, Mark Jonathan
Botha, and Visvanathan Naicker. 2014. “Education and Small Business Growth: A Gender
Perspective of Two Divergent Provinces in South Africa.” International Business &
Economics Research Journal (IBER) 13 (5): 1127–1140.
Podsakoff, Philip M., Scott B. MacKenzie, Jeong-Yeon Lee, and Nathan P. Podsakoff. 2003.
“Common Method Biases in Behavioral Research: A Critical Review of the Literature and
Recommended Remedies.” The Journal of Applied Psychology 88 (5): 879–903.
Rabbani, Mehnaz, and M. Suleiman. 2005. "Financing smes and its effect on employment gen-
eration: A study of brac bank’s sme lending." Research and Evaluation Division, BRAC
Bank. Accessed 15 September 2012. www.Bracresearch.org.
Rahaman, Mohammad M. 2011. “Access to Financing and Firm Growth.” Journal of Banking
& Finance 35 (3): 709–723.
Rahman, S. A., A. Amran, N. H. Ahmad, and S. Khadijeh Taghizadeh. 2019. “The Contrasting
Role of Government and NGO Support towards the Entrepreneurs at Base of Pyramid and
Effect on Subjective Wellbeing.” Journal of Small Business & Entrepreneurship 31 (4): 269–295.
Raravi, P., V. Bagodi, and R. G. Mench. 2013. “Study of Important Factors and Their Impact
on the Performance of Small and Medium Manufacturing Enterprises.” Research Journal of
Economics and Business Studies 2 (7): 1–11.
Rashid, Md Mamunur. 2012. “Proposed Research Direction for Sustainable SMEs in
Bangladesh.” Bangladesh Research Publication 2 (2): 1–10.
Remund, David L. 2010. “Financial Literacy Explicated: The Case for a Clearer Definition in
an Increasingly Complex Economy.” Journal of Consumer Affairs 44 (2): 276–295.
Runyan, R. C., P. Huddleston, and J. Swinney. 2006. “Entrepreneurial Orientation and Social
Capital as Small Firm Strategies: A Study of Gender Differences from a Resource-Based
View.” The International Entrepreneurship and Management Journal 2 (4). doi:10.1007/
s11365-006-0010-3.
Shariff, Mohd Noor Mohd, and Chea Peou. 2008. “The Relationship of Entrepreneurial Values,
Firm Financing and the Management and Growth Performance of Small-Medium
Enterprises in Cambodia.” Problems and Perspectives in Management 6 (4): 55–64.
Siekei, J., W. Juma, and K. Aquilars. 2013. “An Assessment of the Role of Financial Literacy
on Performance of Small and Micro Enterprises: Case of Equity Group Foundation Training
Program on SMES in Njoro District, Kenya.” World Academic Journal of Business & Applied
Sciences 1 (7): 250–261.
Smith, James P., John J. McArdle, and Robert Willis. 2010. “Financial Decision Making and
Cognition in a Family Context.” Economic Journal (London, England) 120 (549): F363–F80.
Soto-Acosta, Pedro, Simona Popa, and Daniel Palacios-Marques. 2015. “E-Business,
Organizational Innovation and Firm Performance in Manufacturing SMEs: An Empirical
Study in Spain.” Technological and Economic Development of Economy 22 (6): 885–820.
Stam, Erik, and Elizabeth W. Garnsey. 2007. "Entrepreneurship in the knowledge economy."
Centre for Technology Management (CTM) Working Paper (2007/04).
Subhan, Qazi Abdul, Mian Rahat Mehmood, and Abdul Sattar. 2013. “Innovation in Small and
Medium Enterprises (SME’s) and Its Impact on Economic Development in Pakistan.” Paper
Presented at the International Business and Social Sciences Research Conference, Dubai, UAE,
January 3–4.
Sullivan, Gail M., and Richard Feinn. 2012. “Using Effect Size-or Why the P Value is Not
Enough.” Journal of Graduate Medical Education 4 (3): 279–282.
Szczygielski, Krzysztof, Wojciech Grabowski, Mehmet Teoman Pamukcu, and Vedat Sinan
Tandogan. 2017. “Does Government Support for Private Innovation Matter? Firm-Level
Evidence from Two Catching-up Countries.” Research Policy 46 (1): 219–237.
The World Bank 2009. Doing Business 2009. Washington: Amazon.com’s publishing.
Uddin, Md Reaz, and Tarun Kanti Bose. 2013. “Factors Affect the Success of SME in Bangladesh:
Evidence from Khulna City.” Journal of Management and Sustainability 3 (3): 166–172.
Pipreka, G. 2009. "Development of Strategy Options for SME Financial Literacy." http://www.
pdf. usaid. gov/pdf_docs. Pnadp093. pdf
Vixathep, S. 2014. “Entrepreneurship, Government Policy and Performance of SMEs in Laos
(No. 28).” Graduate School of International Cooperation Studies, Kobe University.
Wachira, Mwangi Isaac, and Evelyne N. Kihiu. 2012. “Impact of Financial Literacy on Access to
Financial Services in Kenya.” International Journal of Business and Social Science 3 (19): 42–50.
Watson, Warren, Wayne H. Stewart, and Anat BarNir. 2003. “The Effects of Human Capital,
Organizational Demography, and Interpersonal Processes on Venture Partner Perceptions of
Firm Profit and Growth.” Journal of Business Venturing 18 (2): 145–164.
Weerakkody, Dinesh. 2014. “Powering SMEs to Achieve Sustainable Economic Growth.”
DailyFT.
Weinzimmer, L. G., P. C. Nystrom, and S. J. Freeman. 1998. “Measuring Organizational
Growth: Issues, Consequences and Guidelines.” Journal of Management 24 (2): 235–262.
Wickham, Philip A. 2006. Strategic Entrepreneurship. 4th ed. Harlow, UK: Pearson Education.
Wilson, B. 2010. “Using PLS to Investigate Interaction Effects between Higher Order Branding
Constructs.” In Handbook of Partial Least Squares, edited by V. E. Vinzi, W. W. Chin, J.
Henseler and H. Wang, 621–652. Berlin: Springer.
Yazdanfar, Darush. 2012. “The Impact of Financing Pattern on Firm Growth: Evidence from
Swedish Micro Firms.” International Business Research 5 (9): 16.
Yoong, Joanne. 2010. "Financial Illiteracy and Stock Market Participation: Evidence from the
RAND American Life Panel." Pension Research Council Working Paper No. 2010-29.
Yusuf, Attahir. 1995. “Critical Success Factors for Small Business: Perceptions of South Pacific
Entrepreneurs.” Journal of Small Business Management 33: 2–68.
Zaman, A. K. M. Helal, and Md Jahirul Islam. 2011. “Small and Medium Enterprises
Development in Bangladesh: Problems and Prospects.” ASA University Review 5 (1):
145–160.
Appendix A: Items for measuring finance
Item Code Items

FIN1 Start-up capital
FIN2 Additional capital
FIN3 Informal sources of finance
FIN4 Accessed to commercial banks’ loans including the refinancing scheme
of government.
FIN5 Alternative sources of finance (advances, deferred payments, second-hand
equipment, leasing and factoring)
FIN6 Banks require many conditions
FIN7 Higher requirements of collateral
FIN8 High interest rate
FIN9 Financial institutions do not deal with SMEs
FIN10 Use of financial report standard
FIN11 Control over finance
Appendix B: Questions category for measuring financial literacy

of owner-manager
No Category
1 Probability
2 Division
3 Interest rate
4 Time value of money
5 Risk diversification
6 Risk and return
7 Stocks and bonds feature
8 Investment
9 Insurance
10 Inflation
Appendix C: Items for measuring government support
Item Code Items

GS1 Adequate infrastructure (access to road, electricity, water, telephone, and so forth) to run the business.
GS2 License application and registration process.
GS3 Tax incentives for small business.
GS4 Favorable government policy
GS5 Maintain law and order situation
GS6 Skill training programs for small business owner-manager
GS7 Relevant information/ knowledge that assist small firm
GS8 Creation of local business environment that encourages business development

Sustainability Customer Satisfaction Smes Pandemic 6

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sustainability Customer Satisfaction Smes Pandemic 6

Uploaded by

Copyright:

Available Formats

Journal of Small Business & Entrepreneurship

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/rsbe20

Finance, financial literacy and small firm financial

Md. Mosharref Hossain , Yusnidah Ibrahim & Md. Mohan Uddin

To link to this article: https://doi.org/10.1080/08276331.2020.1793097

Published online: 22 Jul 2020.

Submit your article to this journal

View related articles

View Crossmark data

Full Terms & Conditions of access and use can be found at

Finance, financial literacy and small firm financial growth

ABSTRACT ARTICLE HISTORY

CONTACT Md. Mosharref Hossain mosharref04@gmail.com Bangladesh Institute of Bank Management,

connaissances en matiere de finance ont un fort impact positif

2. Objective of the study

i. Examine the relationship between finance, financial literacy of the owner-man-

3.1. Finance and small firm growth

3.2. Financial literacy of owner-manager and small firm financial growth

of financial understanding of an entrepreneur can be measured. According to

3.3. Government support and small firm financial growth

Small Firm Financial Growth

Figure 1. Research model.

4. Research model and hypotheses

5.2. Sample and data collection

5.4. Data analysis techniques

6.2. Common method bias

Table 1. Respondents profile.

6.3. Measurement model evaluation

Table 2. Convergent validity.

Figure 2. Measurement model.

Discriminant validity is estimated to examine the differences between two concep-

6.4. Structural model evaluation

Table 3. Discriminant validity of measurement model.

Table 4. Structural model.

Table 5. Moderating effect of government support.

6.5. Moderating effect

7. Discussion and conclusion

7.1. Theoretical implications

7.2. Practical implications

7.3. Limitations and future research directions

Ahmed, M. U. 2004. “Promoting Business and Technological Incubation for Improved

Appendix A: Items for measuring finance

Item Code Items

Appendix B: Questions category for measuring financial literacy

Appendix C: Items for measuring government support

Item Code Items

You might also like