Determinants of entrepreneurial small and medium enterprises performance with the interaction effect of commercial loans

Abstract

PurposeThe purpose of this study is to investigate the interaction effect of commercial loans in between trade Credit, retain earning, and entrepreneurial small and medium enterprises (SMEs) performance.Design/methodology/approachIn this research, the cross-sectional research design was used, and data were collected from 362 SMEs located in Pakistan by using a questionnaire. Correlation and regression analysis was adopted to establish the interaction effect of commercial loans in between trade credits, retain earning and entrepreneurial SMEs performance.FindingsThe results demonstrated that commercial loans, trade credit and retain earning have a positive relationship with entrepreneurial SMEs performance. The findings also confirmed the interaction effect of commercial loans in between retain earnings, trade credit and entrepreneurial SMEs performance.Originality/valueThe study examined the association and interaction effect of commercial loans in between retain earnings, trade credit and SMEs performance in the emerging state (Pakistan). So, this is the first time to study the relationship between these variables, which highly contributes to entrepreneurial SMEs literature.