Factors that determine financial performance of SMEs in Malaysia

Abdul Razak, Dzuljastri and Othman, Anwar Hasan Abdullah and Zulkifly, Umi Waheeda I'zaaz and Zakaria, Fatin Shafiqah (2021) Factors that determine financial performance of SMEs in Malaysia. Asia Pacific Journal of Social Science Research, 6 (1). pp. 1-16. E-ISSN 2504-8430

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Abstract

Small and Medium Enterprises (SMEs) has been recognized as the backbone to a country’s economic development and social benefits. Malaysian SMEs contributed 38.8% to overall GDP, 17.3% to total exports and 66.2% to total employment. Huge budget allocations were put every year to enhance and encourage the improvement on SMEs. However, it was found that many of the SMEs failed within the first years of its business operations despite various programs and initiatives by the government agencies. Therefore, this paper aims to determine factors that determine sustainable financial performance of SMEs in Malaysia namely, Financial Knowledge, Financial Attitude, Financial Socialization Agents, Financial Skills and Accounting Skills. The relationship of these factors towards SMEs performance is measured using regression and factor analysis conducted using the Statistical Package for the Social Sciences (SPSS) software. Findings reveal that all factors have a significant relationship with SME financial performance in Malaysia except for financial skills. Hence, the authority especially those that provide programmes involving SME can emphasize on the significant factors in their effort to improve the financial performance and increase the survival of SMEs in the industry.

Item Type:	Article (Journal)
Additional Information:	8713/88799
Uncontrolled Keywords:	SMEs, Financial Performance, Financial Knowledge, Financial Attitude, Malaysia
Subjects:	H Social Sciences > HJ Public Finance > HJ1438 Public Finance In Islam
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF) Kulliyyah of Economics and Management Sciences Kulliyyah of Economics and Management Sciences > Department of Finance
Depositing User:	Asst.Prof Anwar Hasan Abdullah Othman
Date Deposited:	10 Mar 2021 12:50
Last Modified:	10 Mar 2021 12:50
URI:	http://irep.iium.edu.my/id/eprint/88799

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