A partial least squares approach to the financing behaviour of micro, small and medium enterprises

Vibhuti Mittal and T.V. Raman

International Journal of Entrepreneurial Venturing, 2022, vol. 14, issue 3, 277-302

Abstract: The present study explores the financing behaviour of micro, small and medium enterprises (MSME) owners. A nexus of owners' personal attributes (PC) and behavioural aspects including financial knowledge (FK), financing motivation (M), and risk taking ability (R) has been created to determine the financing preferences (FP) and capital structure decision (CSD) of firm owners. The research framework adopts quantitative approach to the analysis. 274 responses were collected and analysed through partial least squares structural equation modelling on SmartPLSv2. The findings support the direct and mediating role of M and R in predicting FP and its relationship with PC. Moreover, the study confirms the role of FP in determining CSD in terms of pecking order behaviour among firm owners. The integration of owners' personal characteristics and behavioural factors in determining firms' financial decision adds value to the theory and practice of MSME financing.

Keywords: MSMEs; micro; small and medium enterprises; MSME financing; small business finance; entrepreneurial financing; financing motivation; financing risk. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijeven:v:14:y:2022:i:3:p:277-302

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