Exploring the Moderating Effect of Business Demographics on Financial Management Practices and Business Performance

Logeswary Sooriyakumaran
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Logeswary Sooriyakumaran: Trincomalee campus, Eastern University Sri Lanka

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 6, 279-295

Abstract: This study investigates the moderating role of demographic profiles—specifically business age, education level, and gender—on the relationship between financial management practices (FMP) and business performance (BP) among SMEs in the Northern Province of Sri Lanka. The study employs multi-group analysis in structural equation modelling (SEM) through AMOS 24, prepares categorical data using SPSS 26, conducts moderation analysis using z-scores and nested model comparisons, and evaluates the impact of these demographic factors on the relationship between FMP and BP. Results indicate that business age and education level significantly moderate this relationship, while gender shows limited moderating influence. These results suggest that older firms, through accumulated experience and resource efficiency, leverage FMPs more effectively to improve business performance, while younger firms face relatively higher costs in adopting such practices. The findings support policy and training initiatives tailored by firm age and education to enhance financial capability and SME growth.

Date: 2025
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