Access to finance and performance of small and medium enterprises: mediating role of product and process innovation

P.A. Ibrahim

International Journal of Business Innovation and Research, 2023, vol. 31, issue 3, 317-338

Abstract: The purpose of this paper is to estimate how access to finance enhances SME performance with the mediation role of product and process innovation. Required data was sourced from 276 manufacturing SMEs in India using a structured questionnaire. Structural equation modelling was performed to test the research hypotheses. Results show that product innovation is significantly associated with firm performance and also a mediating role in access to finance - firm performance linkage. However, process innovation insignificant with firm performance and there is no mediating role for process innovation in access to finance - firm performance relation. The findings imply the firm's decision on innovation by highlighting the significance of product innovation on the performance of SMEs. The findings could also apply to the financial institutions and government for financing innovative SMEs.

Keywords: financial access; SME performance; mediation; product innovation; process innovation. (search for similar items in EconPapers)
Date: 2023
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