The impact of regional soft environment on SME performance in China: Considering the moderating effect of firm life cycle

摘要

Research on the affect of regional soft environment (RSE) influencing and accelerating Small and Medium Enterprises' (SME) performance has been paid great attention to by scholars recently. Based on literature review of relationship between external environment and SMEs, some propositions about RSE, SME performance and FLC are derived. On the ground of a survey data from 262 CEO-owners in Chinese SMEs, the paper tests the direct effect of RSE on SMEs performance and the moderating effect of FLC by regression analysis, and several important conclusions can be drawn. First, RSE does have a significantly positive impact on SME performance, whether for short-term or long-term one. Second, the six key components of RSE only have significantly positive influences on SME long-term performance, insignificant on the short-term performance. It means that RSE development in China is a long-term program, and its effect has a time lag. Third, FLC plays a negatively moderating role in the association between RSE and SME performance, which means there is a stronger linkage between RSE and SME performance when SMEs are in earlier stage of organizational life cycle. And finally, the effect and components of RSE on SME performance vary with organizational life cycle.