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Impact of network structure on sustainable competitive performance among Pakistani small and medium enterprises: does government financial support matter?

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Abstract

Government support plays a vital role to push the firms to gain sustainable competitive performance and economic development of an economy. Nevertheless, from the last decades, lack of government subsidies and incentives, especially in emerging economies, cuts owners networking roots at international and national level. Therefore, the current study underlines how networking structure (density and centrality) effects on sustainable competitive performance (thereafter SCPs) in Pakistan’s SMEs. In addition, we conducted a mediating effect of government financial support on relation between networking structure and SCP. Hence, small enterprise is a major source of economic development, employment, and value creation. So, we developed hypothesis based on previous studies–related government financial support and network structure. The data was collected through structured questionnaires from top management of SMEs. The hypothesis was tested through Smart Partial Least Squares (PLS). The results indicated that density has a positive and significant effect on sustainable competitive performance, while centrality has an insignificant effect on SCP. Furthermore, government financial support strongly and significantly supports the relation between networking structure and SCP in Pakistan. This research has several recommendations for government to fully support small enterprises because owners have a networking system at national and international level but they have lack of environment.

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Notes

  1. Small and Medium Enterprises Development Authority

Abbreviations

SCP:

Sustainable competitive performance

GFS:

Government financial support

SMEDA:

Small Medium Enterprises Development Authority

NSD:

Networking structure density

NSC:

Networking structure centrality

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Acknowledgements

We are thankful to the Editor and reviewers for their helpful and positive comments that greatly improved the manuscript.

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Authors and Affiliations

  1. Graduate School of Business, Universiti Sains Malaysia, Gelugor, Malaysia

    Rizwan Ullah Khan, Mohammed Ahmed, Makwan Jamil Mustafa & Yashar Salamzadeh

  2. School of Management, Universiti Sains Malaysia, Gelugor, Malaysia

    Arshad Mahmood, Mohammad Khamis Alshamsi & Qaisar Iqbal

  3. European Sustanable Research Outreach, Wuppertal, Germany

    Arshad Mahmood

  4. Center for China-India-Pakistan Studies, Sichuan University of Science and Engineering, Zigong, 643000, China

    Qaisar Iqbal

Authors
  1. Rizwan Ullah Khan
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  2. Arshad Mahmood
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  3. Mohammed Ahmed
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  4. Makwan Jamil Mustafa
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  5. Mohammad Khamis Alshamsi
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Contributions

Rizwan Ullah Khan developed the model and wrote the original draft. Mohammed Ahmed and Mohammad Khamis Alshamsi reviewed the paper and made necessary contribution, e.g., supervised the paper. Makwan Jameel and Qaisar Iqbal helped in data collection and analysis, while Arshad Mehmood and Yashar Salamzadeh proofread the paper.

Corresponding author

Correspondence to Rizwan Ullah Khan.

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The authors declare no competing interests.

Additional information

This article was updated to correct Arshad Mahmood's, Muhammad Ghanim Ahmad‘s and Makwan Jamil Mustafa's names and affiliation 3.

Appendix

Appendix

Name

S/no

Items scales

Published

Government financial support

1

In my country, government financial policies (e.g., public procurement) consistently favor new firms.

Zamberi Ahmad and Xavier (2012).

2

In my country, the support for new and growing firms is a high priority for policy at the national government level.

3

In my country, the financial support for new and growing firms is a high priority for policy at the local government level.

4

In my country, new firms can get most of the required permits and licenses in about a week.

5

In my country, the amount of taxes is NOT a burden for new and growing firms.

6

In my country, taxes and other government regulations are applied to new and growing firms in a predictable and consistent way.

7

In my country, co** with government bureaucracy, regulations, and licensing requirements is not unduly difficult for new and growing firms

Name

S/no

Items scales

Published

Network structure density

1

Relations among SMEDA members are very close.

(Antia & Frazier, 2001)

2

SMEDA members frequently communicate with each other.

3

SMEDA members frequently discuss common problems.

4

There is very much interaction among SMEDA members through the various gatherings.

5

SMEDA members have extremely close ties.

Name

S/no

Items scales

Published

Network structure centrality

1

Our company is a central component in the SMEDA network.

(Antia & Frazier, 2001).

2

Our company is very central to the SMEDA network.

3

Our company is very active in the SMEDA network.

4

Our company has closed relationship with SMEDA members.

Name

S/no

Items scales

Published

Sustainable competitive performance

1

Return on investment (ROI)

Su et al. (2017).

2

Profits as a percentage of sales

3

Decreasing product or service delivery cycle time

4

Rapid response to market demand

5

Rapid confirmation of customer orders

6

Increasing customer satisfaction

7

In profit growth rates

8

In reducing operating costs

9

Providing better product and service quality

10

Increasing our market share

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Khan, R.U., Mahmood, A., Ahmed, M. et al. Impact of network structure on sustainable competitive performance among Pakistani small and medium enterprises: does government financial support matter?. J Glob Entrepr Res 11, 579–591 (2021). https://doi.org/10.1007/s40497-021-00295-w

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