Determinants of Financial Bootstrapping in Small and Medium Enterprises (SMEs): A Developing Country Perspective

The SMEs around the globe play a decisive role within the economies irrespective of the development status. Nevertheless, these businesses suffer from severe obstacles due to financial constraints and Financial bootstrapping (FB) is a perfect last resort in that regard. Thus, this study examined the determinants of FB within a developing country context. Human capital, social networking, and entrepreneurial perception were identified as the independent variables and use of FB was identified as the dependent variable. A cross-sectional survey was conducted to collect data. Structural equation modeling of least squares (PLS-SEM) was the main analysis method. We contribute to the knowledge by discovering the positive and significant impact of human capital and entrepreneurs' perceptions on the use FB techniques. And, future researchers are encouraged to study potential moderating effects generated by gender, firm age, and business type.