Small and medium-size enterprises’ business performance in tourism industry: the mediating role of innovative practice and moderating role of government support

Abstract

This paper aims to examine the constructs that contribute to the business performance of small and medium enterprises in the tourism industry (TSMEs). Data from 278 TSMEs’ business owners were collected using a quantitative survey method. The results indicate that innovation practice does have a positive mediating role in the relationships between social media usage, business planning extent and TSMEs’ business performance. The study implies that TSMEs will have a better business performance should they emphasis on the practice of innovative strategy, in addition to the adoption of social platform and business planning extent. Hence, more expansive innovation practice is proposed to provide future research explanation. Apart from that, government support does have a significant moderating role in the relationship between innovation practice and TSMEs’ business performance. It is assumed that government support will be stronger for those perceived government support to be higher. Hence, the focus of government policy is to enhance the existing institutional programmes offered, by overcoming the barriers faced by the TSMEs. This study contributes valuable evidence for business enterprises in the tourism sector.