The Moderating Effect of Location on Small Firm Performance: Empirical Evidence

Mohd Sobri Minai, Esuh Ossai-Igwe Lucky

Abstract


The global interest on entrepreneurship and small business development as a means of economic sustainability
and growth through emphasis on location has not been commonly utilized and openly declared. However, the
inconsistent results on the relationship between entrepreneurial factors and firm performance have led the
authors to propose a contingency model in which the effects of individual determinants, external factors and firm
characteristics on firm performance are moderated by location. A cross-sectional study of questionnaire survey
research design was conducted and data was generated from 182 entrepreneurs or owner-managers of small
firms in both manufacturing and service industries. The questionnaires were distributed through drop-off and
pick procedure of data collection. The findings indicate that location strongly moderate the relationship between
both external factors and firm characteristics with firm performance. However, it is found that location factor
does not moderate the relationship between individual determinant and small firm performance.

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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