The Effect of New and Traditional Sources of Financing on the Performance of Small and Entrepreneurship Businesses: The Case of Qatar

Figures & data

Figure 1. Study Framework.

Table 1. Variables with Expected Sign of Influence on Businesses Performance

Variables	Denotes	Hypothesis	Expected Sign
A1	Preferring Debt Over Equity due to Risk	H1	–
A2	Ease of Getting Funds	H3	+
A3	Family Effect on Financing	H2	+
A4	Opportunity to Access Funds	H3	+
A5	Internal Equity Financing	H2	+
A6	Government Organizational Support	H3	+
A7	Preferring Informal Financing than Formal	H2	+
A8	Usage of Crowdfunding	H4	+
A9	Usage of Capital Ventures	H4	+
A10	Usage of Business Angels	H4	+
A11	Preferring Debt Over Equity in Expansion	H1	–
A12	Lack of Collateral Funding Limitations	H3	–
A13	Usage of Peer-to-Peer Finance	H4	+

Note that to exclude any multicollinearity effect, which might be seen due to the strong relationship between independent variables, a correlation was constructed accordingly. None of the independent variables was excluded, as the strongest relationship of 62% occurred between crowdfunding and P2P, which are similar innovative sources of finance. As stated, to improve the efficiency of results, the dependent variable (Business Performance) was tested in relation to its three main perspectives, whereas all equations tested the impact of types and sources of finance on SEBs’ performance, according to their categories of financial, marketing and internal business and development performance.

Table 2. Sources of Finance and the Three Aspects of Performance

	Types and Sources of Finance Effect on SEBs Three Aspects of Performance
		Financial Performance	Marketing Performance	IB&D Performance
	Variables	Coefficients
A1	Preferring Debt to Equity	−0.020	−0.054	−0.028
A2	Ease of Funds	0.029	0.033	0.050
A3	Family Effect	−0.054	−0.020	−0.064
A4	Access of Funds	0.231***	0.031	0.080
A5	Internal Finance	−0.054	−0.006	−0.015
A6	Governmental Support	0.031	−0.096	−0.154***
A7	Informal Finance	0.028	−0.028	−0.032
A8	Crowdfunding	−0.086	−0.350***	−0.314***
A9	Capital Venture	−0.098	0.091	0.104
A10	Business Angels	−0.114**	−0.064	−0.044
A11	Debt to Equity in Expansion	−0.130**	0.044	0.010
A12	Lack of Collateral	−0.055	−0.127*	−0.099*
A13	Peer to Peer	0.047	0.153*	0.098
	Adjusted R-Square	0.203	0.155	0.226

The table shows the findings of regressing different performance aspects on our independent variables using Ordinary Least Square regression. *** P-value < 1% ** P-value < 5% * P-value < 10%

Figure 2. Results Summary.

Table 3. Sources of Finance and the Overall Aspects of Performance

Variables	M1	M2
Preferring Debt to Equity	−0.03	-
Ease of Funds	0.043	-
Family Effect	−0.055	-
Access of Funds	0.108*	0.115**
Internal Finance	−0.022	-
Governmental Support	−0.103*	−0.056
Informal Finance	−0.017	-
Crowdfunding	0.267***	−0.224***
Capital Venture	0.056	-
Business Angels	−0.063	-
Debt to Equity in Expansion	−0.017	-
Lack of Collateral	−0.093*	−0.135***
Peer to Peer	0.095	-
Adjusted R-Square	0.146	0.159

***P-value < 1% **P-value < 5% *P-value < 10%