Influence of Financial Services on SMEs Performance in Libya: The Mediating Role of Government Regulastions

Abstract

Business performance is a common phenomenon for every business organization. Historically speaking, small firms have failed  since they are have limited access to resources if compared to larger firms.Therefore, the purpose of the study is to examine and investigate the main factors  that impact performance of small and medium-sized enterprises (SMEs) in Libya. In addition, this study identifies the role of government regulations as a mediating variable influential in financial services and SMEs performance. The sample of the present study consists of a total 356 SMEs analysed using the structural equation modelling (SEM)   in order to examine causal relationships among the study latent variables. The results of study show that two direct hypotheses are significant. They include positive relationships between  financial services and government regulations as well as government regulations and SMEs performance. On the other hand, one direct hypothesis is insignificant to financial services with SMEs performance. Moreover, the results of the study indicate that government regulation is full meditaition between  government regulation and SMEs performance.