The Role of Government Financial Support Programmes, Risk-Taking Propensity, and Self-Confidence on Propensity in Business Ventures

Abstract

This study identifies the effect of government financial support services (GFSS) on the relationship between two dimensions of psychological factors in business ventures. As such, the study uses small and medium enterprises (SMEs) of various Malaysian sectors as samples, with two constructs used to represent the dimensions of psychological factors, namely, risk-taking (RT) propensity and self-confidence (SC). The study results revealed that both constructs had a significant influence on the propensity to venture into business (PVB). However, GFSS had an insignificant moderating effect on the relationship between the two dimensions and provided input for policy makers to enhance GFSS efficiency in order to positively affect the growth rate of new businesses in Malaysia. Hence, this study bridged the research gap by identifying the influence of GFSS on PVB. As GFSS are an important tool for stimulating growth of the new business venture, the findings of this study have implications for policy makers to improve the quality and effectiveness, especially the delivery of GFSS to the targeted group.