Articlegreen2020

The impact of improvisation and financial bootstrapping strategies on business performance

28 citations0/0 files storedEuroMed Journal of Business

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Entrepreneurship Studies and Influences Working Capital and Financial Performance Economic Systems and Logistics Management

Abstract

Purpose This 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/approach Using 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. Findings Statistically 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/implications Due 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 implications The 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/value While 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.

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References

1981Evaluating Structural Equation Models with Unobservable Variables and Measurement Error 1991Firm Resources and Sustained Competitive Advantage 2014A new criterion for assessing discriminant validity in variance-based structural equation modeling 2004Firm resources and sustained competitive advantage 1997Dynamic capabilities and strategic management 1986Self-Reports in Organizational Research: Problems and Prospects 2009\nThe use of partial least squares path modeling in international marketing 1999Use of partial least squares (PLS) in strategic management research: a review of four recent studies

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2022Internationalization of family business and its performance: examining the moderating role of digitalization and international networking capability 2022Synthesizing research in entrepreneurial bootstrapping and bricolage: a bibliometric mapping and TCCM analysis 2023Effects of improvisational behavior on entrepreneurial activities and firm performance: the moderating roles of firm size and business experience 2024The influence of financial bootstrapping and digital transformation on financial performance: evidence from MSMEs in the culinary sector in Indonesia

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