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Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation

Author

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  • Mukhamad Najib

    (Department of Management, IPB University, Bogor 16680, Indonesia)

  • Abdul Aziz Abdul Rahman

    (College of Business Administration, Kingdom University, Riffa 40434, Bahrain)

  • Farah Fahma

    (Department of Agroindustrial Technology, IPB University, Bogor 16680, Indonesia)

Abstract

This study aimed to investigate the effects of government support for the business survival of SME restaurants in Indonesia. In this study, we analyzed the impact of government support on the innovation of SME restaurants as well as the impact of entrepreneurial self-efficacy on innovation. Furthermore, this study analyzed the impact of entrepreneurial self-efficacy and innovation on business survival. A total of 120 owners or managers of SME restaurants participated in this study. The sample was collected based on a purposive method. To analyze the relationship among latent variables, we implemented structural equation modeling (SEM). The results show that government support has a positive impact on business survival through marketing and process innovation. In addition, the business survival of SMEs is affected by marketing innovation, process innovation, and entrepreneurial self-efficacy. In this study, the entrepreneurial factor had the highest impact on SMEs’ survival. This study established the body of knowledge related to the positive effect of government support on innovation in the perspective of small and medium-sized restaurants in the emerging market countries and developed a model of business survival of SMEs during pandemic crises by integrating external factors (government support) and an internal factor (entrepreneurial self-efficacy) through marketing and process innovation in the food processing industry.

Suggested Citation

  • Mukhamad Najib & Abdul Aziz Abdul Rahman & Farah Fahma, 2021. "Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation," Sustainability, MDPI, vol. 13(19), pages 1-16, September.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:19:p:10535-:d:641091
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    Cited by:

    1. Hua Tang, 2022. "The Effect of ESG Performance on Corporate Innovation in China: The Mediating Role of Financial Constraints and Agency Cost," Sustainability, MDPI, vol. 14(7), pages 1-21, March.
    2. Ishardita Pambudi Tama & Willy Satrio Nugroho & Wayan Firdaus Mahmudy & Purnami Purnami, 2022. "The Evaluation of Technology Startup Role on Indonesian SMEs Industry 4.0 Adoption Using CLD-ABM Integrated Model," Sustainability, MDPI, vol. 14(14), pages 1-14, July.
    3. Mukhamad Najib & Abdul Aziz Abdul Rahman & Abror Abror & Riani Rachmawati & Megawati Simanjuntak & Prita Prasetya & Dwi Suhartanto & Farah Fahma, 2021. "Leaders’ Support of Sustainable Innovation and Business Sustainability in Developing Countries: Evidence from Small and Medium Food Processing Enterprises," Sustainability, MDPI, vol. 13(23), pages 1-19, November.
    4. Bruno Francisco Diniz Marinho & Isotilia Costa Melo, 2022. "Fostering Innovative SMEs in a Developing Country: The ALI Program Experience," Sustainability, MDPI, vol. 14(20), pages 1-16, October.
    5. Mingyue Li & Yu Liu & Yuhe Huang & Lianbei Wu & Kai Chen, 2022. "Impacts of Risk Perception and Environmental Regulation on Farmers’ Sustainable Behaviors of Agricultural Green Production in China," Agriculture, MDPI, vol. 12(6), pages 1-20, June.
    6. Florentina Kurniasari & Elissa Dwi Lestari & Hendy Tannady, 2023. "Pursuing Long-Term Business Performance: Investigating the Effects of Financial and Technological Factors on Digital Adoption to Leverage SME Performance and Business Sustainability—Evidence from Indo," Sustainability, MDPI, vol. 15(16), pages 1-20, August.

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