The role of social desirability, financial and technological supports in explaining the performance of small and medium businesses

In the challenging and volatile environment of developing economies, small and medium-sized enterprises (SMEs) face structural, institutional, and environmental challenges that make it difficult for them to innovate, improve performance, and achieve sustainable competitive advantage. Despite having entrepreneurial tendencies, dynamic human capital, and growth incentives, many of these enterprises are unable to transform their potential capacities into effective innovation and sustainable performance. In such circumstances, attention to the role of contextual factors and multifaceted support resources, especially informal financial support, technological infrastructure, and the social desirability of the business brand, has become increasingly important. These factors are recognized as critical inputs in creating competitive advantage and can fundamentally transform organizational performance by strengthening social trust, facilitating access to resources, and enhancing technological capabilities.



The present study aims to investigate the direct and indirect effects of these three factors on firm performance, using a combined approach of quantitative and qualitative analyses, and attempts to identify and explain diverse causal paths to achieving high performance and sustaining competitive advantage. This study is of an applied and developmental type and, using a causal-combination approach, seeks to present a multi-path model for analyzing organizational performance in small and medium-sized firms. The statistical population of the study includes senior managers of firms active in the Iranian market who were selected

based on specialized criteria. Data were collected through a structured questionnaire and validated with reliability tests (Cronbach's alpha), convergent and divergent validity (AVE index), and measurement model fit (Fornell-Larcker and SRMR).

Data analysis was conducted at two complementary levels. At the first level, structural equation modeling with partial least squares approach (PLS-SEM) was used to measure direct relationships, moderating effects, and fit of the conceptual model. This analysis examined the effect of informal financial support as an independent variable, through the mediating variables of social desirability and technological support, on entrepreneurial performance. At the second level, fuzzy sets analysis (fsQCA) was performed to discover causal combinations of success, using causal equivalence logic. This analysis examined necessary, sufficient, and combined conditions simultaneously by determining consistency thresholds (0.900) and frequency (26), and calculating three types of cost-effective, intermediate, and complex solutions.



Findings from the structural model showed that the two factors of social desirability and technological infrastructure have a direct and positive effect on organizational performance, while informal financial support appeared mainly indirectly and through strengthening other influential factors. The results of the fsQCA analysis also showed that the performance of small and medium-sized businesses is not influenced by one factor, and there is no single path to success; rather, different combinations of financial, technological, and social conditions can lead to the same result, namely, high performance. Specifically, although informal financial support was identified as a necessary condition for success, firms can achieve high performance through two different paths: the first path involves the combination of informal financial support and social desirability in the absence of technological support, which has high validity with a consistency of 0.900 and a raw coverage of 0.503; the second path consists of informal financial support and technological support in the absence of social desirability, which is accompanied by a consistency of 0.915 and a raw coverage of 0.491. The sum of these two paths has a total coverage of 0.621 and a total consistency of 0.886, strengthening the theoretical, empirical, and practical validity of the model in identifying combinations that affect high performance.

In conclusion, the present study shows that in changing and challenging environmental conditions, the simultaneous and targeted use of informal and technological supports, along with brand social desirability and the promotion of knowledge and network capacities, can pave the way for innovation and sustainable competitive advantage. Also, the integrated approach of quantitative and fuzzy analyses has provided a deeper understanding of causal relationships, the logic of organizational performance, and success mechanisms, which can be generalized in future studies. The research findings contain important theoretical implications for the development of multilevel models of organizational success and provide practical strategies for executives and business policymakers. Among other things, it is recommended that managers pay special attention to the capacities of informal and technological support networks, enhance the social standing of their brand, and use integrated approaches for analysis, decision-making, and design of executive actions. Based on the findings of this research, policymakers can design multifaceted, context-based, and flexible support programs that help strengthen innovation and entrepreneurial performance and increase the ability of firms to adapt to environmental changes and create sustainable value.