Unveiling organic growth strategies of MSMEs: The interrelation of entrepreneurial and business capabilities
DOI:
https://doi.org/10.24914/jeb.v29i1.19055Keywords:
Organic growth, firm reputation, financial bootstrapping, financial literacy, access to capitalAbstract
There were still limited studies that integrate finance, particularly funding, with entrepreneurship disciplines to create organic growth strategies that lead to improved business reputations and access to capital for MSMEs. Therefore, this study aimed to analyze the interrelationship between financial factors, including financial bootstrapping, financial literacy, and access to capital, and entrepreneurial factors, namely organic growth and firm reputation. This study utilized a quantitative-positivistic approach by empirically testing the developed research model. Surveys were conducted both on-site and online, involving 128 MSMEs from various sectors in the city of Salatiga and Semarang Regency, which have been noted to have quite robust MSME growth after the COVID-19 pandemic in Central Java Province. The findings indicated that financial bootstrapping had a positive effect on MSME organic growth. Furthermore, organic growth improved the firm reputation, and the firm reputation influenced access to capital. Meanwhile, the moderating role of financial literacy on the influence of financial bootstrapping on organic growth, and the causality between organic growth and access to capital are not supported. This study was expected to contribute to the development of MSME financial management regarding creative funding strategies to support organic business growth, leading to improved business reputations and financial inclusion. Moreover, it provided policymakers with insights for designing and initiating policies that favor MSMEs in Indonesia.
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