Author

  • Saqib Muneer

    • Government College University Faisalabad, Pakistan
    • Pakistan

  • Rao Abrar Ahmad

    • Government College University Faisalabad, Pakistan
    • Pakistan

  • Azhar Ali

    • Government College University Faisalabad, Pakistan
    • Pakistan

Abstract

The importance of Small and medium enterprises (SMEs) towards economic development and growth is considerable. Some SMEs are facing difficulties to their development due to the lack of financial resources and management experience. The objective of this study is to check the relationships of financial management practices on profitability of small and medium enterprises and also to check the impact of agency cost on this relationship. This study consists of data analysis of two hundred SMEs from Faisalabad Pakistan. The study used primary data predominantly. SPSS 23 is used for descriptive analysis and Structural Equation Model (SEM) through Partial Least Square (PLS) 3 for hypothesis testing. The findings of this study indicate the presence of positive relationship between financial management practices and SMEs profitability but agency cost as a moderator has no effect on this relationship. The study strongly recommends higher adherence to financial management practices. Policy makers, developments partners, owners, and managers of SMEs may use these findings for sustainability of their business in Pakistan.

Keywords

References

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How to Cite

Muneer, S., Ahmad, R. A., & Ali, A. (2017). Impact of Financial Management Practices on SMEs Profitability with Moderating Role of Agency Cost. Information Management and Business Review, 9(1), 23-30. https://doi.org/10.22610/imbr.v9i1.1593

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Research Paper

Published in

Vol. 9 No. 1 (2017) Sovereign Debt, Learning Organizations & Networks View issue contents

Published

2017-04-07

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