An Implication of Importance – Performance Analysis (IPA) for Financial Literacy of Small and Medium Enterprises (SMEs) of Service Firm in Southern Region
DOI:
https://doi.org/10.55164/ecbajournal.v17i2.268902Keywords:
Finance, Service Business, Importance – Performance AnalysisAbstract
The research aims to 1) investigate importance level and performance level of financial literacy of small and medium enterprises (SMEs) for service firm in Southern region; and 2) analyze the difference of importance level and performance level of financial literacy of small and medium enterprises (SMEs) for service firm in Southern region. Quantitative research was used in this study. The data was collected from 400 entrepreneurs of small and medium enterprises (SMEs) for service firm in Southern region with valid and reliable questionnaire. The data was analyzed by confirmatory factor analysis and Importance-Performance Analysis. The results showed that the level to financial literacy of importance; namely, cash management, accounting, cost calculation, feasibility study, financing, and business plan, were high level. Similarity, the level to financial literacy of performance were the highest. In addition, the IPA technique presented that cash management was in Quadrant I; accounting and cost calculation were in Quadrant II; feasibility study was in Quadrant III; and, financing and business plan were in Quadrant IV. This study can adapt the strategy of the small and medium enterprises.
References
Afrifa, G. A., & Tingbani, I. (2018). Working Capital Management, Cash Flow and SMEs' Performance. International Journal of Banking, Accounting and Finance, 9(1), 19-43.
Agarwal, S., & Mazumder, B. (2013). Cognitive Abilities and Household Financial Decision Making. American Economic Journal: Applied Economics, 5(1), 193-207.
Ali, I., Ali, M., Salam, M. A., Bhatti, Z. A., Arain, G. A., & Burhan, M. (2020). How International SME's Vicarious Learning May Improve Their Performance? The Role of Absorptive Capacity, Strength of Ties with Local SMEs, and Their Prior Success Experiences. Industrial Marketing Management, 88, 87-100.
Ali, Z., Gongbing, B., & Mehreen, A. (2018). Does Supply Chain Finance Improve SMEs Performance? The Moderating Role of Trade Digitization. Business Process Management Journal, 26(1), 150-167.
Alles, L., Jayathilaka, R., Kumari, N., Malalathunga, T., Obeyesekera, H., & Sharmila, S. (2021). An Investigation of The Usage of Capital Budgeting Techniques by Small and Medium Enterprises. Quality & Quantity, 55, 993-1006.
Amoako-Adu, B., & Eshun, J. P. (2018). SME Financing in Africa: Collateral lending vs Cash Flow Lending. International Journal of Economics and Finance, 10(6), 151-159.
Andersén, J., & Samuelsson, J. (2016). Resource Organization and Firm Performance: How Entrepreneurial Orientation and Management Accounting Influence the Profitability of Growing and Non-Growing SMEs. International Journal of Entrepreneurial Behavior & Research, 22(4), 466-484.
Annoni, M., Giberti, H., & Strano, M. (2016). Feasibility Study of an Extrusion-Based Direct metal Additive Manufacturing Technique. Procedia Manufacturing, 5, 916-927.
Anshika, A., & Singla, A. (2022). Financial Literacy of Entrepreneurs: A Systematic Review. Managerial Finance, 48(9/10), 1352-1371.
Atkinson, A. (2017). Financial Education for MSMEs and Potential Entrepreneurs. Paris: Insurance and Private Pensions, OECD Publishing.
Azudin, A., & Mansor, N. (2018). Management Accounting Practices of SMEs: The Impact of Organizational DNA, Business Potential and Operational Technology. Asia Pacific Management Review, 23(3), 222-226.
Bandura, A. (1986). Social Foundations of Thought and Action: A Social Cognitive Theory. Englewood Cliffs, NJ: Prentice Hall.
Bank of Thailand. (2023). Economic Situation in Southern of Thailand. Retrieved from https://www.bot.or.th/th/thai-economy/regional-economy/southern-economy/the-state-of-southern-economy/Press_SO_Q3_66.html
Barte, R. (2012). Financial Literacy in Micro-Enterprises: The Case of Cebu Fish Vendors. Philippine Management Review, 19, 91-99.
Brinckmann, J., Dew, N., Read, S., Mayer-Haug, K., & Grichnik, D. (2019). Of Those who Plan: A Meta-Analysis of the Relationship Between Human Capital and Business Planning. Long Range Planning, 52(2), 173-188.
de Araújo Lima, P. F., Crema, M., & Verbano, C. (2020). Risk Management in SMEs: A Systematic Literature Review and Future Directions. European Management Journal, 38(1), 78-94.
Dolz, C., Iborra, M., & Safón, V. (2019). Improving the Likelihood of SME Survival During Financial and Economic Crises: The Importance of TMTs and Family Ownership for Ambidexterity. Business Research Quarterly, 22(2), 119-136.
Dufour, D., Luu, P., & Teller, P. (2018). The Influence of Cash Flow on The Speed of Adjustment to the Optimal Capital Structure. Research in International Business and Finance, 45, 62-71.
Dvouletý, O., Srhoj, S., & Pantea, S. (2021). Public SME Grants and Firm Performance in European Union: A Systematic Review of Empirical Evidence. Small Business Economics, 57, 243-263.
Engström, P., & McKelvie, A. (2017). Financial Literacy, Role Models, and Micro-Enterprise Performance in the Informal Economy. International Small Business Journal, 35(7), 855-875.
Erdogan, A. I. (2018). Factors Affecting SME Access to Bank Financing: An Interview Study with Turkish Bankers. Small Enterprise Research, 25(1), 23-35.
Games, D., & Rendi, R. P. (2019). The Effects of Knowledge Management and Risk Taking on SME Financial Performance in Creative Industries in An Emerging Market: The Mediating Effect of Innovation Outcomes. Journal of Global Entrepreneurship Research, 9(44), 1-14.
Gerrans, P., & Heaney, R. (2019). The Impact of Undergraduate Personal Finance Education on Individual Financial Literacy, Attitudes and Intentions. Accounting & Finance, 59(1), 177-217.
Goyal, K., & Kumar, S. (2021). Financial Literacy: A Systematic Review and Bibliometric Analysis. International Journal of Consumer Studies, 45(1), 80-105.
Hair, J. F., Anderson, B. W., Babin, B. J., & Anderson, R. E. (2018). Multivariate Data Analysis with Reading (Vol. 8th). New Jersey: Prentice-Hall.
Iramani, Fauzi, A. A., Wulandari, D. A., & Lutfi. (2018). Financial Literacy and Business Performances Improvement of Micro, Small, Medium-Sized Enterprises in East Java Province, Indonesia. International Journal of Education Economics and Development, 9(4), 303-323.
Kaigama, Y. M., Talib, N., & Ashari, H. (2016). Moderating Effect of Financial Literacy in the Relationship Between Microfinance Banks and Small Business Survival. Indian Journal of Innovations and Developments, 5(12), 1-6.
Kattiyawong, T, Kuanprasong, L, & Niyomwong, T. (2019). Financial Liquidity Risk which Affects the Efficiency and Operation Potential of SMEs in the Eastern Economic Border Trading Zone of Chantaburi Provinces, Rajabhat Rambhai Barni Journal, 13(3), 130-139.
Keasey, K., Pindado, J., & Rodrigues, L. (2015). The Determinants of the Costs of Financial Distress in SMEs. International Small Business Journal, 33(8), 862-881.
Kumar, S., Sureka, R., & Colombage, S. (2020). Capital Structure of SMEs: A Systematic literature Review and Bibliometric Analysis. Management Review Quarterly, 70, 535-565.
Laghari, F., & Chengang, Y. (2019). Investment in Working Capital and Financial Constraints: Empirical Evidence on Corporate Performance. International Journal of Managerial Finance.
Lavia López, O., & Hiebl, M. R. (2015). Management Accounting in Small and Medium-Sized Enterprises: Current Knowledge and Avenues for Further Research. Journal of Management Accounting Research, 27(1), 81-119.
Lee, J. Y., Jiménez, A., & Devinney, T. M. (2020). Learning in SME Internationalization: A New Perspective on Learning from Success Versus Failure. Management International Review, 60, 485-513.
Lestari, S. D., Leon, F. M., Widyastuti, S., Brabo, N. A., & Putra, A. (2020). Antecedents and Consequences of Innovation and Business Strategy on Performance and Competitive Advantage of SMEs. Journal of Asian Finance, Economics and Business, 7(6), 365-378.
Li, K., Niskanen, J., & Niskanen, M. (2019). Capital Structure and Firm Performance in European SMEs: Does Credit Risk Make a Difference? Managerial Finance, 45(5), 582-601.
Lusardi, A., & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy: Theory and Evidence. American Economic Journal: Journal of Economic Literature, 52(1), 5-44.
Mabula, J. B., & Ping, H. D. (2018). Use of Technology and SME Managers' Financial Literacy in Developing Economies. Paper Presented at The Proceedings of the 2018 2nd International Conference on E-Education, E-Business and E-Technology.
Mandell, L., & Klein, L. S. (2007). Motivation and Financial Literacy. Financial Services Review, 16(2), 105.
Mangsiri, N. (2014). Investment Guideline for SMEs Restaurant Business Experian in Yoawarat. SDU Research Journal, 10(2), 167-180.
Markus, G., & Rideg, A. (2021). Understanding the Connection Between SMEs’ Competitiveness and Cash Flow Generation: An empirical analysis from Hungary. Competitiveness Review: An International Business Journal, 31(3), 397-419.
Marriott, N., & Mellett, H. (1996). Health Care Managers' Financial Skills: Measurement, Analysis and Implications. Accounting Education, 5(1), 61-74.
Mazzarol, T. (2014). A Review of The Latest Research in the Field of Small Business and Entrepreneurship: Financial Management in SMEs. Small Enterprise Research, 21(1), 2-13.
McKeever, M. P. (2018). How to write a business plan. Nolo.
MGR Online. (2023). SMEs Supported Southern’s SME: Goals to Rebuild SME About New Normal in 2021. Retrieved from: https://mgronline.com/smes/detail/9630000101127
Moeuf, A., Pellerin, R., Lamouri, S., Tamayo-Giraldo, S., & Barbaray, R. (2018). The Industrial Management of SMEs in The Era of Industry 4.0. International Journal of Production Research, 56(3), 1118-1136.
Moschis, G. P. (1987). Consumer Socialization: A Life-Cycle Perspective. Lexington, MA: Lexington Books.
Najera Ruiz, T., & Collazzo, P. (2021). Determinants of The Use of Accounting Systems in Microenterprises: Evidence from Chile. Journal of Accounting in Emerging Economies, 11(4), 632-650.
Nasrallah, N., & El Khoury, R. (2022). Is Corporate Governance a Good Predictor of SMEs Financial Performance? Evidence from Developing Countries (The Case of Lebanon). Journal of Sustainable Finance & Investment, 12(1), 13-43.
Nukfon, C., & Phosrichan, N. (2021). The Relationship Between Single Bookkeeping Efficiency and Operational Success of Small and Medium Enterprise Size: SMEs – Nakhon Phanom, Mukdahan and Sakon Nakhon. Journal of Modern Management Science, 14(1), 55-66.
Office of Small and Medium Enterprise Promotion. (2021). Report of Office of Small and Medium Enterprise Promotion Situation in 2021. Bangkok: Office of Small and Medium Enterprise Promotion
Office of Small and Medium Enterprise Promotion. (2022). Number of Small and Medium Enterprise in 2021-2022. Retrieved from: https://data.go.th/dataset/https-sme-go-th-th-page-php-modulekey-348
Pattarabanjird, S. (2016). Financial Liquidity Management for SMEs Entrepreneurs in World Economic Crisis. MBA-KKU Journal, 9(1), 281-303.
Paul, J. (2020). SCOPE framework for SMEs: A New Theoretical Lens for Success and Internationalization. European Management Journal, 38(2), 219-230.
Plakalović, N. (2015). Financial Literacy of SMEs Managers. Managing Intellectual Capital and Innovation for Sustainable and Inclusive Society, 409-416.
Ponio, J., & Timog, R. (2017). Financial Knwoledge, Behavior and Attitude of Micro Business Owners: Basis for Developing Financial Literacy Training Modules. International Journal of Management and Applied Science, 3(12), 35-40.
Rachapaettayakom, P., Wiriyapinit, M., Cooharojananone, N., Tanthanongsakkun, S., & Charoenruk, N. (2020). The Need for Financial Knowledge Acquisition Tools and Technology by Small Business Entrepreneurs. Journal of Innovation and Entrepreneurship, 9, 1-28.
Rao, P., Kumar, S., Chavan, M., & Lim, W. M. (2021). A Systematic Literature Review on SME Financing: Trends and Future Directions. Journal of Small Business Management, 1-31.
Seghers, A., Manigart, S., & Vanacker, T. (2012). The Impact of Human and Social Capital on Entrepreneurs’ Knowledge of Finance Alternatives. Journal of Small Business Management, 50(1), 63-86.
Sengpanich, U. (2021). Causal Factors Affecting Operating Constraints and Access to Finance from Financial Iinstitutions of Small and Medium Enterprises (SMEs) in Phitsanulok. Humanities and Social Sciences Journal of Pibulsongkram Rajabhat University, 15(1), 13-26.
Singla, A., & Mallik, G. (2021). Determinants of Financial Literacy: Empirical Evidence from Micro and Small Enterprises in India. Asia Pacific Management Review, 26(4), 248-255.
Soltanian, M., Zailani, S., Iranmanesh, M., & Aziz, A. A. (2016). Motivations of SME Entrepreneurs to Become Halalpreneurs. Journal of Science and Technology Policy Management, 7(2), 173-182.
Song, H., Yang, X., & Yu, K. (2020). How do Supply Chain Network and SMEs’ Operational Capabilities Enhance Working Capital Financing? An Integrative Signaling View. International Journal of Production Economics, 220, 107447.
Srhoj, S., Lapinski, M., & Walde, J. (2021). Impact Evaluation of Business Development Grants on SME Performance. Small Business Economics, 57, 1285-1301.
Stone, G. (2015). Power, Dependence and Frustration: A Study of Power in Australian Accountants’ Advisory Relationship with Small Business. Meditari Accountancy Research, 23(3), 250-275.
Supaporn, N. (2021). Competitiveness and Competitive Adventages of Small and Medium Enterprise Entrepreneurs (SMEs) in Nonthaburi Province. Santapol College Academic Journal, 7(2), 43-52.
Sureka, R., Kumar, S., Colombage, S., & Abedin, M. Z. (2022). Five Decades of Research on Capital Budgeting–A Systematic Review and Future Research Agenda. Research in International Business and Finance, 60, 101609.
Sutthison, R, Chaowakeeratiphong, T, & Wongnaya, S. (2015). Strategy Development for Small Business Operation of Entrepreneur in Kamphaeng Phet Province. Social Sciences Research and Academic Journal, 10(28), 47-64.
Tadhakorn, T., & Juntuk, T. (2017). How to be New Generation Entrepreneurs in Thailand 4.0. RMUTT Global Business and Economics Review, 12(2), 107-122.
Theppitak, T., Modsai, T., & Rattanopat, P. (2021). Enhancing Competitive Advantage for SMEs of Thailand in ASEANs by Adopting Development and Driving Logistics Management. Journal of Management Science, Chiang Rai Rajabhat University, 16(1), 44-58.
Tunsri, K., Jarutanyalak, S., Mulakut, O., Sinpo, P., Vattanaudomchai, S,, & Chancharat, S. (2014). Financial Access for Small and Medium Enterprises (SMEs) in the Northeaster Region. University of the Thai Chamber of Commerce Journal (Humanities and Social Sciences), 34(3), 1-19.
Wachira, I. M., & Kihiu, E. N. (2012). Impact of Financial Literacy on Access to Financial Services in Kenya. International Journal of Business and Social Science, 3(19), 40-50.
Wadesango, N., Tinarwo, N., Sitcha, L., & Machingambi, S. (2019). The Impact of Cash Flow Management on the Profitability and Sustainability of Small to Medium Sized Enterprises. International Journal of Entrepreneurship, 23(3), 1-19.
Wang, S., & Wang, H. (2020). Big Data for Small and Medium-Sized Enterprises (SME): A Knowledge Management Model. Journal of Knowledge Management, 24(4), 881-897.
Wang, X., Han, L., & Huang, X. (2020). Bank Competition, Concentration and EU SME Cost of Debt. International Review of Financial Analysis, 71, 101534.
Wong, A., Holmes, S., & Schaper, M. T. (2018). How do Small Business Owners Actually Make their Financial Decisions? Understanding SME Financial Behaviour Using a Case-Based Approach. Small Enterprise Research, 25(1), 36-51.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Faculty of Economics and Business Administration, Thaksin University
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
