Factors Affecting Startup Performance of Small and Medium-sized Enterprises in Danang City

Abstract

Objective: The aim of the study is to examine the factors such as government policy, financial capital, cultural factors, social factors, and human capital that influence SMEs business success.

Research Design & Methods: By observing many factors that affect businesses, this study applies structural equation modeling using partial least squares (PLS-SEM) to provide an understanding on how people may start their business. These factors help to reduce risks of failure and in-crease chances of success.

Findings: The results of testing indicate the suitability of the research model with data's re-search. Along with the acceptance of hypotheses, this research model shows the prac-tical meaning of startup performance.

Implications & Recommendations: For a sustainable startup, there should be suitable legal policies, including incentive policies on taxes in the first 3-5 years, when new businesses are established. Moreover, we should focus on policies such as credit, guarantee, and loan assistance for startup enterprises in their initial stages to solve their problems.

Contribution & Value Added: Many young people in Danang are entrepreneurs. The government also supports these activities and readily assists startup project effectiveness. Therefore, this study helps to understand the factors that affect startup performance.

Keywords

structural equation model, partial least squares, startup performance, small and medium sized enterprises, business environment

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