Peer-to-Peer lending, financial bootstrapping and government support: The role of innovation mediation on MSME performance

This study aims to examine whether Peer-to-Peer (P2P) lending, financial bootstrapping and government support affect the performance of Micro, Small, and Medium-sized Enterprises (MSMEs) by adding a mediating variable in the form of innovation. Innovation mediation is expected to be able to optimize the influence of government funding and incentives towards improving business performance. This study used an SEM-PLS analysis technique. The study samples were the MSMEs located in the city of Salatiga - Central Java, Indonesia. The results showed that P2P lending and financial bootstrapping had a positive effect on business performance and innovation. While government support had a positive effect on innovation, on the one hand, it had no effect on business performance, on the other. Innovation itself is proven to have an influence on business performance. This study also finds that innovation mediates the effect of P2P lending on business performance, facilitates the effect of financial bootstrapping on business performance and reconciles the effect of government support on business performance.

On the hook

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings Entrepreneurship is key to economic revivals after significant downturns. Financial bootstrapping can be a method of boosting entrepreneurial success. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

The impact of improvisation and financial bootstrapping strategies on business performance

PurposeThis paper aims to examine the effect of financial bootstrapping strategies (FBS) and strategic improvisation (SI) on business performance (BP). The study enriches our understanding of the contributions of bootstrapping and improvisation strategies toward resource-constrained small businesses during real economic downturns and crises. The potential moderating effect of SI on the relationship between FBS and its dimensions and performance were also examined.Design/methodology/approachUsing the convenience snowball sampling technique, data were collected from entrepreneurs in Tripoli, Libya. Structural equation modeling by means of partial least square bootstrapping resampling was used for the hypotheses testing of the 147 useable responses.FindingsStatistically significant positive relationships were found in the direct relationships between bootstrapping and improvisation with performance. However, there was no significant association found between the delaying payment related bootstrapping and the owner-related bootstrapping with performance. The moderating effect of improvisation had a significant relationship between bootstrapping as an aggregate construct and its dimensions and performance.Research limitations/implicationsDue to the cross-sectional nature of this study which used a small sample that was randomly selected, generalization to the entire population of business ventures should be made with caution.Practical implicationsThe negative moderation effect of improvisation on FBS-BP association suggests that entrepreneurs need to be careful in balancing the two strategies so that efforts are no wasted.Originality/valueWhile business performance has been studied in various organizations, its examination with financial bootstrapping strategies as a predictor and strategic improvisation as a moderator contribute nascent theoretical insights.

IMPACT OF AWARENESS AND KNOWLEDGE ON THE FINANCIAL BOOTSTRAPPING STRATEGIES UTILIZED BY IMMIGRANT ENTREPRENEURS IN SOUTH AFRICA

Purpose of the study: This paper investigated the extent to which the awareness and knowledge of financial bootstrapping determined the techniques used by immigrant entrepreneurs in the retail clothing sector in the Cape Town metropolitan area. Methodology: A quantitative research approach was used to collect and analyze data. Through self-administered questionnaires, 135 respondents participated in the study. The data obtained were analyzed using the Statistical Package for the Social Sciences (SPSS) software, version 24. Main Findings: The results point to the fact that while the respondents made use of a wide range of financial bootstrapping techniques, there was no sufficient evidence to support the fact that this was influenced by their level of awareness and knowledge of these methods. Even the respondents with limited or no knowledge of the concept of financial bootstrapping applied the strategies in their businesses. Applications of this study: This paper may directly benefit immigrant entrepreneurs, besides informing future research and policy. Novelty/Originality of this study: This paper validates the extent to which awareness and knowledge of financial bootstrapping influences the strategies utilized by immigrant entrepreneurs in South Africa.

Financial bootstrapping among Costa Rican small businesses: an exploratory study

This study identifies and analyzes the financial bootstrapping techniques commonly used by small businesses in Costa Rica. The empirical application uses a unique sample of 161 Costa Rican SMEs for 2017. The results of the parallel factor analysis reveal that the analyzed SMEs adopt different types of bootstrapping techniques primarily related to the owners, customers, and alliances that facilitate the joint utilization of facilities and other assets. Entrepreneurs bootstrap their businesses to reduce the reliance on external financing. In this sense, the results of this study show that, rather than simply using what entrepreneurs are familiar with (e.g., credit from family or friends), Costa Rican small business managers are exploring and actively using a wide array of alternative methods in order to access financial resources.

Owners' Characteristics and the Financial Bootstrapping Strategies Used by Rural Small Businesses in South Africa

The purpose of this study was to examine if there are significant differences in the financial bootstrapping strategies of rural small businesses on the basis of owners' demographic characteristics (level of education and gender). The research followed a quantitative research method with descriptive research design. A sample of 104 rural small businesses participated in the survey. Data was collected through the use of self-administered questionnaires in a survey. The participants in the study were rural small business owners in Fetakgomo Municipality located in the Limpopo Province of South Africa. The study utilised the convenience and snowball sampling techniques to select the study participants. Data analysis included descriptive statistics, factor analysis and the T-test. The Cronbach alpha was used to measure reliability. The results of the T-test showed significant differences between gender and level of education and the financial bootstrapping methods used by rural small businesses. Recommendations are made to improve the awareness of bootstrapping by small business owners.