Supply Chain Diversification, Firm Persistence, and the Role of Finance: Case of Iranian MSMEs

Saleh Goltabar (), Iman Cheratian () and Hamed Najaf ()
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Saleh Goltabar: Academic Center for Education, Culture, and Research
Iman Cheratian: Academic Center for Education, Culture, and Research (ACECR)
Hamed Najaf: Economist, UN Administrative and Budgetary Expert, Iran Representative

No 1774, Working Papers from Economic Research Forum

Abstract: This paper examines the relationship between supply chain diversification (SCD) and the persistence of micro, small, and medium-sized enterprises (MSMEs) in Iran, with a focus on the moderating role of external finance. Using a Probit regression analysis and marginal effect estimations on a sample of 480 firms, the study reveals that SCD positively influences the persistence of firms with full access to external finance. However, for firms lacking external finance or relying solely on internal finance, SCD reduces their probability of persistence. These findings underscore the essential role of external finance in enabling MSMEs to leverage SCD as a resilience strategy. The paper provides policy recommendations to enhance MSMEs' access to external finance, especially in regions affected by sanctions.

Pages: 25
Date: 2025-05-20, Revised 2025-05-20
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Published by The Economic Research Forum (ERF)

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