The Differential Effects of Government Support, Inter-Firm Collaboration, and Firm Financial Resources on SME Performance in Vietnam

Abstract

Small and medium-sized enterprises (SMEs) are crucial for the economic development of nations, and governments in both emerging and developed economies pay close attention to them. Small and medium-sized enterprises (SMEs) play a crucial role in job creation, enhancing business competitiveness, fostering innovation, and contributing to economic development. To address this, we investigated the moderating effect of government support on the relationship between firm financial resources, inter-firm collaboration, and SME performance. This research collects data from Vietnamese SMEs via questionnaires to test the hypotheses. PLS-SEM is the chosen method for analyzing the collected data in this investigation. Both firm financial resources and inter-firm collaboration positively influence SME performance, consistent with the institutional theory and resource-based view's emphasis on the significance of resources for firm success. In addition, the study demonstrates that government support moderates these relationships significantly. Vietnam's policymakers should prioritize and act to support small and medium-sized enterprises better. By providing financial resources, developing collaborative platforms, and streamlining regulations, policymakers can foster an environment that maximizes the positive effect of firm financial resources and inter-firm collaboration on the performance of SMEs. By highlighting the moderating effect of government support, the study emphasizes the significance of a supportive policy environment in maximizing the benefits of these relationships. Policymakers, SMEs, and relevant parties in Vietnam can use these findings to influence their efforts to promote the growth and success of SMEs.