Deepening the dialogue on SME business performance: Are there nonlinear effects as well?

Abstract

Studies analyzing the business performance of small and medium-sized enterprises are high in number and importance. Throughout the years, a vast number of variables have been introduced to explain what causes the observed difference in the business performance of small and medium-sized enterprises. However, many previous studies looked at only linear effects of such variables, while neglecting potential non-linear aspects. This study tried to fill that gap in the literature by using both linear and quadratic effects of well-established variables in the literature. By using linear regression on a sample of 245 small and medium-sized enterprises, this study reports that entrepreneurial experience has a significant quadratic effect, while gender has a significant linear effect on business performance. Based on the employed methodology and results, limitations of this study and avenues for future research were outlined.

Keywords

• entrepreneurship
• sme
• business performance