An empirical examination of the Impact of Initial Capital, Prior
Experience, and R&D on SMEs’ Survival and Economic Performance:
Moderating Role of Innovation Culture
Abstract
Abstract
SMEs’ survival and performance continue to be a central concern for
strategy experts. There are numerous factors that affect the SMEs’
survival for new entrants in the industry. This study incorporates
research on the survival and performance of new entrant SMEs in a
relationship with initial capital investment, experience, R&D, and
innovation culture. We examined the influence of the SMEs’ initial
investment, experience, R&D, and innovation culture on its survival and
performance guided by the evolutionary model of entry and exit to
conclude whether these are positively related to each other. Further, we
investigated moderated role of innovation culture between initial
capital, experience, R&D, and firm performance. The outcomes of this
study established on a large size sample of 337 SMEs suggest that firms
with a large initial investment, prior experience, and R&D have higher
probabilities of survival and economic performance and innovation
culture strengthens the relationship between predictor and outcome
constructs.