Factors Affecting Performance of Small & Medium Enterprises: The Mediating Role of Knowledge Management

Abstract

Entrepreneurial orientation, entrepreneurial innovation, and knowledge management all play critical roles in improving the performance of Pakistan's small and medium-sized enterprises (SMEs). Pakistan's business index score decreased from 137th to 138th due to the country's low performance in the small and medium-sized enterprise sector. Small and medium-sized firms must overcome several obstacles in order for the country's economy to thrive. This study will address this issue. We used a cross-sectional design and a quantitative technique in our research. Data were acquired via an email questionnaire and analyzed using the structural equation modeling technique and SmartPls. The findings suggested that entrepreneur orientation and innovation are critical factors in enhancing the success of SMEs. Additionally, knowledge management acts as a buffer between entrepreneurial attitude and organizational performance, as well as between entrepreneurial innovation and organizational performance. The study's findings have a number of implications for SME management and policymakers, including the importance of innovation and knowledge management in achieving better performance standards.