Does Entrepreneurial Financial Support Guarantee New Ventures’ Performance via Competitive Advantage and Innovation? Empirical Answers from Ho Chi Minh City Region, Vietnam

Abstract

This research applied the resource-based view (RBV) theory to examine the effects of entrepreneurial financial support on new ventures’ performance via competitive advantage and innovation. A questionnaire survey was performed to collect data from 315 entrepreneurs of new ventures in the Ho Chi Minh City region. A quantitative method was applied, and partial least squares structural equation modeling (PLS-SEM) was utilized to confirm the significant relationships among variables of the research model. The findings demonstrated that all financial and operational performances of new venture constructs in this research model were completely supported. Furthermore, entrepreneurial financial support had the strongest direct and indirect effects on firm innovation and competitive advantage, while firm innovation and competitive advantage fully mediated relationships between entrepreneurial financial support and firms’ financial and operational performance. Hence, this research solved extant debates in the literature, concurrently enhancing the RBV theory in the entrepreneurship context. In the post-COVID-19 pandemic era, it offers novel insight for governors and other stakeholders to build an efficient financial support system, while providing entrepreneurs with strategies to leverage said system to develop innovation for achieving better competitive advantage, leading to higher firm performance.