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The Role of Government Support in Sustainable Competitive Position and Firm Performance

Yang Songling (), Muhammad Ishtiaq (), Muhammad Anwar () and Hamid Ahmed ()
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Yang Songling: Faculty of Finance, School of Management and Economic, Beijing University of Technology, 100 Pingleyuan, Beijing 100124, China
Muhammad Ishtiaq: Faculty of Finance, School of Management and Economic, Beijing University of Technology, 100 Pingleyuan, Beijing 100124, China
Muhammad Anwar: Faculty of Management Sciences, International Islamic University Islamabad, Islamabad 44000, Pakistan
Hamid Ahmed: Skans School of Accountancy, F8 Markaz Islamabad, Islamabad 44000, Pakistan

Sustainability, 2018, vol. 10, issue 10, 1-17

Abstract: Achievement of sustainable competitive position and superior performance is the first priority of business organizations. However, small firms, due to fairly known reasons; lack of resources, financial capabilities and lack of managerial skills are often unable to succeed in their mission. Hence, they often look for less risky and convenience sources to compete in the market. A variety of factors has been tested towards a firm competitive position and performance but the role of government support in this perspective has received minor attention. The present study examines the influence of government financial support and nonfinancial support on firm performance with mediating role of the sustainable competitive position. Hypotheses were tested using structural equation modeling in Analysis Moment of Structure (AMOS) on a data set of 326 Pakistani Small and Medium Size Enterprises (SMEs). The results indicate that government financial and nonfinancial support have a significant influence on sustainable competitive position and firm performance. Additionally, a sustainable competitive position partially mediates the relationship between government support and firm performance. Government bodies and policy makers are advised to provide financial and nonfinancial support to SMEs which in turn can upsurge economic growth and sustainability.

Keywords: government financial support; nonfinancial support; sustainable competitive position; firm performance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
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