A comparative study of small and medium enterprises's (SMEs) business success factors between Malaysia and Indonesia: environment emphasis

Abstract

Small and Medium Enterprises (SMEs) in Malaysia and Indonesia contribute significantly towards the nations’ economies in terms of gross domestic product (GDP), employment creation, poverty alleviation and economic growth. However, to ensure the long-run survival and accelerated growth of SMEs, the most important factors for their business success should be identified and studied. This present study aims to examine the relationship between business success factors and SMEs performance in Malaysia and Indonesia. This study also targets to explore the similarities and differences in terms of business success factors between Malaysia and Indonesia and to what extent environmental preservation measures impacted their SMEs performance. For this purpose, this research employs regression analysis and relates the findings with economic theories and puts more emphasis on environmental indicators. It was found that for Malaysia, financial management, credit accessibility and prospective human resource challenge have a significant and positive correlation with SMEs’ business success. Specifically, in the Indonesian context, it was portrayed that environment measure and environment initiatives’ benefit correlate positively and significantly with SMEs’ performance. For prospective ICT challenge, it was shown to have a significant and positive correlation with SMEs’ performance for both countries. Finally, this study offers several policy recommendations for policymakers and suggestions for future research.