Moderating Effect of Liquidity Risk on the Organisational Culture, Working Capital Management and Innovation towards Firm Performance

Abstract

This study aims to investigate the impact of organisational culture, working capital management, innovation performance with the moderating effect of liquidity risk towards SME firm performance. In order to test the relationship between variables, 311 questionnaires were distributed and collected with self-report and with google forms. This study also used Statistical Packages for the Social Science (SPSS) to test the hypothesis of this study. A total of six hypotheses were distributed in this study and as a result, this study found that there was a significant negative relationship between organisational culture and firm performance. and it supported the mixed findings of the previous study, but there was a significant positive relationship between working capital management and firm performance and innovation with firm performance. Similarly, this study also found that liquidity risk which is the moderating role of this study strengthens the degree of the relationship between organisational culture and firm performance, However, liquidity risk does not moderate the relationship between working capital management and firm performance, as well as between innovation and firm performance. At the end, out of six hypotheses in this study, three hypotheses have the significant positive effect which has been accepted, and three significant negative effects of hypothesis which have been rejected.