Small firm performance: an empirical analysis in Malaysian housing construction industry

Abstract

Purpose The purpose of this paper is to evaluate the importance of innovation for the performance of small firms in the construction sector. Furthermore, this paper also examines the influence of several factors related to entrepreneurial capital (entrepreneurial value, business strategy, experience and training) on small firm performance in the sector. Design/methodology/approach This study uses primary data of 255 small firms in the construction sector under the category of small contractors (G1). Stratified sampling method was utilized for data collection, which is then analyzed using the descriptive and multiple regression analysis to achieve the objectives of the study. Findings The findings showed that the factor of innovation and several factors related to entrepreneurial capital (entrepreneurial value, business strategy and business experience) have a significant positive relationship with the performance of small firms in the construction sector. However, factor of training indicated a significant negative correlation with small firm performance. Research limitations/implications Although this study found a significant impact in explaining the factors that affect performance, particularly in the construction sector, it only takes into account only some internal factors (entrepreneurial capital and innovation). Proposed future research should consider a variety of other factors mainly related to external factors, such as economic development, growth potential, industry structure, internal social capital and government policy. Practical implications This study provides clear implications related to the theory and contributions to the literature related to research in the construction sector. The study also provides invaluable insightfulness to various stakeholders including policy makers, institutional support and small contractors about the importance of innovation and entrepreneurial capital in determining the performance of small firms in the sector. Originality/value The results provide supportive evidence that entrepreneurial values and business strategy are important internal factors in determining the performance of a firm, which is consistent with the theory of resource-based view. Experience and training factors, as indicators of firm performance, are articulated in the theory of human capital. Hence, the findings not only can strengthen both the theories but also make a significant contribution to the literature of the study, particularly in the construction sector.

Development of Service Quality Model as Determinants toward Banking Performance

“…Research results related to the effect of service quality on performance do not always give the same results as the literature. Previous research results (Mahmood, Zahari, Yaacob, & Zin, 2017) did not show any effect of automated service quality dimensions on financial performance.…”

The Impact of Cost Strategy Policies on Company Performance in the Construction Industry in Brazil

“…In El-Hallaq and Tayeh (2015), companies apply most of the strategies. Mahmood et al (2017), andOyewobi, Windapo andRotimi (2017) have concluded that there is evidence that corporate values and strategy are important internal factors in determining a company's performance, in addition to other organizational factors.…”

“…It implies that the company's attributes are different from rivals and creates consumer loyalty (PORTER, 1986, p. 49). Mahmood et al (2017), analyzing 255 small construction companies in Malaysia using questionnaires and descriptive analysis and multiple regression have concluded that there is evidence that business values and strategy are important internal factors in determining a company's performance, in addition to others organizational factors. Oyewobi, Windapo and Rotimi (2017) reach the same conclusion by evaluating 72 large companies in South Africa using structural equations of partial least squares.…”

“…The lack of strategic thinking is further exacerbated by the prevalence of small construction companies in the sector (SOETANTO;DAINTY, 2009). However, there is evidence that corporate values and strategy are important internal factors in determining the performance of construction companies with a positive impact on the growth of these companies (MAHMOOD et al, 2017;ZAIDI et al, 2018;OYEWOBI, WINDAPO and ROTIMI, 2017).…”

The Effect Of Personality Traits On The Performance Of Student Enterprises

“…, Lisboa et al (2016),Danso et al (2016),Bahari et al (2017),Ozaralli and Rivenburgh (2016),Mahmood et al (2017), Meroño-Cerdán et al (2018 andIsaga (2018). On the other hand, other personality traits such as need for achievement (Hypothesis 1) and propensity of risk taking (Hypothesis 3) were not shown to have a positive link with performance of SEPs by results (H1: b = -0.014, t = 0.179; H3: b = 0.060, t = 0.870).…”