Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation

Mukhamad Najib (), Abdul Aziz Abdul Rahman and Farah Fahma
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Abdul Aziz Abdul Rahman: College of Business Administration, Kingdom University, Riffa 40434, Bahrain
Farah Fahma: Department of Agroindustrial Technology, IPB University, Bogor 16680, Indonesia

Sustainability, 2021, vol. 13, issue 19, 1-16

Abstract: This study aimed to investigate the effects of government support for the business survival of SME restaurants in Indonesia. In this study, we analyzed the impact of government support on the innovation of SME restaurants as well as the impact of entrepreneurial self-efficacy on innovation. Furthermore, this study analyzed the impact of entrepreneurial self-efficacy and innovation on business survival. A total of 120 owners or managers of SME restaurants participated in this study. The sample was collected based on a purposive method. To analyze the relationship among latent variables, we implemented structural equation modeling (SEM). The results show that government support has a positive impact on business survival through marketing and process innovation. In addition, the business survival of SMEs is affected by marketing innovation, process innovation, and entrepreneurial self-efficacy. In this study, the entrepreneurial factor had the highest impact on SMEs’ survival. This study established the body of knowledge related to the positive effect of government support on innovation in the perspective of small and medium-sized restaurants in the emerging market countries and developed a model of business survival of SMEs during pandemic crises by integrating external factors (government support) and an internal factor (entrepreneurial self-efficacy) through marketing and process innovation in the food processing industry.

Keywords: entrepreneurial self-efficacy; marketing innovation; process innovation; SEM (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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