Does financial availability sustain financial, innovative, and environmental performance? Relation via opportunity recognition

Abstract

Traditionally, firms tend to incline toward financial performance and profitability to surge shareholder's wealth. In the modern day, in addition to financial performance, innovative and environmental performance has also become a central effort. However, all firms are not flourished in the achievement of financial, innovative, and environmental performance, particularly small‐ and medium‐sized enterprises (SMEs), which need adequate financial resources due to lack of resources and can search for opportunities to boost their performance. This research examines the role of financial availability in financial, innovative, and environmental performance with a mediating role of opportunity recognition. Empirical evidence is collected through structured questionnaires from 347 SMEs operating in the emerging market Pakistan. Hypotheses are tested in Analysis of a Moment Structure (AMOS) using structural equation modeling. Results indicate that satisfactory financial resources significantly contribute to financial and innovative performance but play an insignificant role in environmental performance as well. In addition, firms with enough financial capital recognize new opportunities significantly via opportunity recognition mediator, where partially mediating the relation between financial availability and financial/innovative performance. However, firms fully mediate the link between financial availability and environmental performance. Our research findings recommend CEOs and top managers to utilize their financial resources in an efficient way to achieve the advantage of the new opportunity recognition, superior financial, innovative, and environmental performance.

Unpacking the importance of intangible skills in new product development and sustainable business performance; strategies for marketing managers

“…Our findings match several studies which have scrutinized a significant positive association between FL and sustainable competitive performance [51,56] and innovative performance [122]. Consistent with Memon, Yong and Memon [123] who revealed that financial literature managers have high capabilities of exploiting new opportunities and generating new ideas that are very helpful for high performance.…”

Intellectual capital and the efficiency of SMEs in the transition economy China; Do financial resources strengthen the routes?

“…It is doubtless that intangible resources are essential for SMEs' growth and survival in transition and emerging economies. However, mere intangible resources do not boost operational activities of SMEs, they must have satisfactory finance to recognize new opportunities to enhance their innovative and financial performance [79]. The efficient use of financial resources saves ventures from wastage of capital in different investment activities and enables firms to utilize the resources properly [80].…”

“…financial resources indicate a firm capacity to have finance and capital to be used for the smooth running of operational activities. To measure FA, we used five items adopted from the prior study Memon, An and Memon [79].…”

The Nexus of Government Incentives and Sustainable Development Goals: Is the Management of Resources the Solution to Non-Profit Organisations?

“…Additionally, environmental and social activities need adequate financial resources (Memon et al, 2020) and many organizations due to limited financial resources do not participate in volunteer activities (Danso et al, 2019). Hence, we believe that the endeavour is cherished to test if government incentives motivate NPOs toward SDGs.…”