THE DETERMINANTS AFFECTING THE GROWTH PERFORMANCE BASED ON SECTORS OF SMALL AND MEDIUM SIZED ENTERPRISES (SMEs) IN MALAYSIA

Abstract

SMEs have been the backbone of a country’s economy and there have been numerous studies on SMEs from the past researches. In most studies, SMEs growth performance is linked with financial management variables, but very limited studies have been conducted on sales growth, ROCE, working capital management, asset management, production management, cash flow management, profitability and corporate governance based on sectors and states of SMEs in Malaysia. This study examined the factors that influence the growth performance of SMEs in Malaysia, especially for non-listed private limited SMEs for the year 2014-2018. This research studied the relationship between the working capital management (accounts receivable period), asset management (total asset turnover), production management (value added labour productivity) cash flow management (free cash flow), profitability (net profit), corporate governance (directors’ remuneration) and with the sectors and states of SMEs in Malaysia. Panel data analysis using E-view was used to analyse the data which consists of 256 samples of SMEs from manufacturing, service, agriculture, construction and mining and quarry sectors in Malaysia.