Promoting Factors of SMEs in Bangladesh: A Comprehensive Study

Abstract

The specific objectives of this study are to investigate the effect of the promoting factors on the success of SMEs in Bangladesh and to identify the moderating effect of entrepreneur's skills between relationship of the promoting factors and the success of SMEs in Bangladesh. This study was conducted on 100 SMEs of Rajshahi District of Bangladesh by preparing the structured interview questionnaire in collecting the data about selected factors regarding SMEs of the owners and managers of the firm. Smart partial least squares (PLS) version 3.0 computer software based structural equation modelling (SEM) technique developed by Chin (1998); Gefen, Straub, and Boudreau (2000) was used to analyze the data as well as to test the associated hypotheses. A research model was developed after reviewing the literature and on the basis of that model hypothesis were developed. Quantitative approach and closed-ended questions were used in this study. The non-probability sampling specifically convenient sampling was used to draw the sample from research population. In this study, the survey was conducted among 450 respondents at the owner and managerial level of SMEs in Bangladesh where 399 questionnaires were usable. A 7-point Likert scale questionnaire was used to collect the information to measure the factors and constructs of the proposed model. In this research, data was analyzed by structural equation modelling. With the support of SPSS version 23 and Smart-PLS 3.0., this section deals with data. interpretation and conclusions in line with the hypotheses. The analysis is followed by the assessment of the measurement model in relation to convergent validity, construct reliability and validity, and eventually, discriminant validity in various sub-sections. To test the structural model, structural· model estimation, R2, f2, multi-collinearity (VIF) and predictive relevance (Q2) were used. The details of the path coefficient (direct relationship), the results of the study of moderation and mediation, the summary of “the hypotheses were presented. The result of this study shows that marketing network is most affecting factor that create the effect on the success of SMEs in Bangladesh. The findings of this study are beneficial to various stakeholders of SMEs in Bangladesh that includes owners, managers, employees, creditors, suppliers, customers, policy makers finally government and other various private organizations in making policy, strategy as well as setting goals. The most important contribution of the research is to identify the vital factors that affect the success of SME in Bangladesh.