The Moderating Effect of Location on Small Firm Performance: Empirical Evidence
The global interest on entrepreneurship and small business development as a means of economic sustainability and growth through emphasis on location has not been commonly utilized and openly declared. However, the inconsistent results on the relationship between entrepreneurial factors and firm performance have led the authors to propose a contingency model in which the effects of individual determinants, external factors and firm characteristics on firm performance are moderated by location. A cross-sectional study of questionnaire survey research design was conducted and data was generated from 182 entrepreneurs or owner-managers of small firms in both manufacturing and service industries. The questionnaires were distributed through drop-off and pick procedure of data collection. The findings indicate that location strongly moderate the relationship between both external factors and firm characteristics with firm performance. However, it is found that location factor does not moderate the relationship between individual determinant and small firm performance.