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The interrelationship of working capital: The role of financial bootstraping and government support

Author

Listed:
  • Rita Maria Rio

    (Satya Wacana Christian University, Indonesia)

  • Supramono

    (Satya Wacana Christian University, Indonesia)

  • Dayamanti Theresia Woro

    (Satya Wacana Christian University, Indonesia)

  • Nastiti Pambayun Kinasih Yekti

    (Satya Wacana Christian University, Indonesia)

Abstract

This study aims to investigate the effects of financial bootstrapping and government support on working capital, as well as the moderating role of entrepreneurial orientation towards the impact of working capital on financial performance. The study was conducted on 260 MSME owners in the food and beverage sector in Semarang, Surakarta, and Salatiga, in Central Java Province, Indonesia. By using a Partial Least Squares-Structural Equation Modeling (PLS-SEM) analysis, the determinant effects and consequences of working capital were determined. The findings of this study indicate that financial bootstrapping and government support are proven to have a significant positive effect on working capital. Working capital has a significant positive effect on financial performance, but entrepreneurial orientation is not confirmed to moderate the effect of working capital on financial performance.

Suggested Citation

  • Rita Maria Rio & Supramono & Dayamanti Theresia Woro & Nastiti Pambayun Kinasih Yekti, 2024. "The interrelationship of working capital: The role of financial bootstraping and government support," Financial Internet Quarterly (formerly e-Finanse), Sciendo, vol. 20(1), pages 51-63, March.
    • Handle: RePEc:vrs:finiqu:v:20:y:2024:i:1:p:51-63:n:5
    DOI: 10.2478/fiqf-2024-0005
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    More about this item

    Keywords

    Financial Performance; Working Capital; Entrepreneurial Orientation; Financial Bootstrapping; Government Support;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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