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Factors that determine financial performance of SMEs in Malaysia

Small and Medium Enterprises (SMEs) has been recognized as the backbone to a country’s economic development and social benefits. Malaysian SMEs contributed 38.8% to overall GDP, 17.3% to total exports and 66.2% to total employment. Huge budget allocations were put every year to enhance and encou...

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Main Authors: Abdul Razak, Dzuljastri, Othman, Anwar Hasan Abdullah, Zulkifly, Umi Waheeda I'zaaz, Zakaria, Fatin Shafiqah
Format: Article
Language:English
Published: ABRN Asia 2021
Subjects:
HJ1438 Public Finance In Islam
Online Access:http://irep.iium.edu.my/88799/7/88799_Factors%20that%20determine%20financial%20performance%20of%20SMEs%20in%20Malaysia.pdf
http://irep.iium.edu.my/88799/
http://abrn.asia/ojs/index.php/apjssr/article/view/111/92
https://doi.org/10.37263/apjssr.v6i1.111
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spelling my.iium.irep.887992021-03-10T04:50:31Z http://irep.iium.edu.my/88799/ Factors that determine financial performance of SMEs in Malaysia Abdul Razak, Dzuljastri Othman, Anwar Hasan Abdullah Zulkifly, Umi Waheeda I'zaaz Zakaria, Fatin Shafiqah HJ1438 Public Finance In Islam Small and Medium Enterprises (SMEs) has been recognized as the backbone to a country’s economic development and social benefits. Malaysian SMEs contributed 38.8% to overall GDP, 17.3% to total exports and 66.2% to total employment. Huge budget allocations were put every year to enhance and encourage the improvement on SMEs. However, it was found that many of the SMEs failed within the first years of its business operations despite various programs and initiatives by the government agencies. Therefore, this paper aims to determine factors that determine sustainable financial performance of SMEs in Malaysia namely, Financial Knowledge, Financial Attitude, Financial Socialization Agents, Financial Skills and Accounting Skills. The relationship of these factors towards SMEs performance is measured using regression and factor analysis conducted using the Statistical Package for the Social Sciences (SPSS) software. Findings reveal that all factors have a significant relationship with SME financial performance in Malaysia except for financial skills. Hence, the authority especially those that provide programmes involving SME can emphasize on the significant factors in their effort to improve the financial performance and increase the survival of SMEs in the industry. ABRN Asia 2021-03-06 Article PeerReviewed application/pdf en http://irep.iium.edu.my/88799/7/88799_Factors%20that%20determine%20financial%20performance%20of%20SMEs%20in%20Malaysia.pdf Abdul Razak, Dzuljastri and Othman, Anwar Hasan Abdullah and Zulkifly, Umi Waheeda I'zaaz and Zakaria, Fatin Shafiqah (2021) Factors that determine financial performance of SMEs in Malaysia. Asia Pacific Journal of Social Science Research, 6 (1). pp. 1-16. E-ISSN 2504-8430 http://abrn.asia/ojs/index.php/apjssr/article/view/111/92 https://doi.org/10.37263/apjssr.v6i1.111
institution Universiti Islam Antarabangsa Malaysia
building IIUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider International Islamic University Malaysia
content_source IIUM Repository (IREP)
url_provider http://irep.iium.edu.my/
language English
topic HJ1438 Public Finance In Islam
spellingShingle HJ1438 Public Finance In Islam
Abdul Razak, Dzuljastri
Othman, Anwar Hasan Abdullah
Zulkifly, Umi Waheeda I'zaaz
Zakaria, Fatin Shafiqah
Factors that determine financial performance of SMEs in Malaysia
description Small and Medium Enterprises (SMEs) has been recognized as the backbone to a country’s economic development and social benefits. Malaysian SMEs contributed 38.8% to overall GDP, 17.3% to total exports and 66.2% to total employment. Huge budget allocations were put every year to enhance and encourage the improvement on SMEs. However, it was found that many of the SMEs failed within the first years of its business operations despite various programs and initiatives by the government agencies. Therefore, this paper aims to determine factors that determine sustainable financial performance of SMEs in Malaysia namely, Financial Knowledge, Financial Attitude, Financial Socialization Agents, Financial Skills and Accounting Skills. The relationship of these factors towards SMEs performance is measured using regression and factor analysis conducted using the Statistical Package for the Social Sciences (SPSS) software. Findings reveal that all factors have a significant relationship with SME financial performance in Malaysia except for financial skills. Hence, the authority especially those that provide programmes involving SME can emphasize on the significant factors in their effort to improve the financial performance and increase the survival of SMEs in the industry.
format Article
author Abdul Razak, Dzuljastri
Othman, Anwar Hasan Abdullah
Zulkifly, Umi Waheeda I'zaaz
Zakaria, Fatin Shafiqah
author_facet Abdul Razak, Dzuljastri
Othman, Anwar Hasan Abdullah
Zulkifly, Umi Waheeda I'zaaz
Zakaria, Fatin Shafiqah
author_sort Abdul Razak, Dzuljastri
title Factors that determine financial performance of SMEs in Malaysia
title_short Factors that determine financial performance of SMEs in Malaysia
title_full Factors that determine financial performance of SMEs in Malaysia
title_fullStr Factors that determine financial performance of SMEs in Malaysia
title_full_unstemmed Factors that determine financial performance of SMEs in Malaysia
title_sort factors that determine financial performance of smes in malaysia
publisher ABRN Asia
publishDate 2021
url http://irep.iium.edu.my/88799/7/88799_Factors%20that%20determine%20financial%20performance%20of%20SMEs%20in%20Malaysia.pdf
http://irep.iium.edu.my/88799/
http://abrn.asia/ojs/index.php/apjssr/article/view/111/92
https://doi.org/10.37263/apjssr.v6i1.111
_version_ 1695530663084556288
score 13.211869

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