P095 The Financial Capital and Business Performance of Micro-Entrepreneurs: The Moderating Role of Government Non-Financial Support

Abstract

The government's non-financial support plays a significant role in boosting the positive influence of entrepreneurs' financial capital on the success of micro-businesses by minimizing financing limits, risk sharing, and promoting efficient fund utilization. Despite substantial research into the relationship between financial capital and entrepreneurial performance, empirical data on its direct impact on business performance is inconsistent, implying that capital alone does not ensure business success. Using the resource-based approach (RBV), this study investigates whether government non-financial support moderates the relationship between financial capital and micro-entrepreneurs' business performance.  The study uses a non-probability purposive sampling method to choose a sample of micro-business owners and entrepreneurs from the region. Data were collected using self-administered questionnaires with a 7-point Likert scale. Out of 350 surveys distributed, 256 valid replies were successfully returned and used. The gathered data was then analyzed using the SEM-PLS approach with SmartPLS 4.1.1.2 software. The findings show that government non-financial support moderates the link between financial capital and business performance in micro-enterprises. It demonstrates that for micro-entrepreneurs, financial capital plays an important role in their business performance; thus, the government should prioritize easy access to outside financial capital, such as from financial institutions and government agencies, in their efforts to assist micro entrepreneurs in general, who account for the majority of business establishments in Malaysia, in succeeding and contributing to the country's economic growth. This study adds to the growing literature on micro-entrepreneurial development in emerging nations and makes practical recommendations to policymakers and company owners. Implementing measures to increase financial capital, as well as fostering trust-based interactions with external stakeholders, can improve corporate outcomes.