ACCESS OF TECHNOLOGY AS A MEDIATOR ON ACCESS TO FINANCE TO DRIVE BUSINESS INNOVATION IN SMALL TO MEDIUM-SIZED ENTERPRISES

This study assesses the role played by 'access to finance' as an indirect stimulant of business development and economic growth. The 'access to technology' is considered as a mediator in analyzing growth. A dataset that spans five years was gathered from small to medium-sized enterprises (SMEs) in different sectors, was analyzed as panel data through fixed and random effect regression estimation models. The results showed that access to technology playing marked role in mediating the relationship between access to finance and the adopted process sophistication. The results further showed that while access to finance is crucial driver for development in emerging economies, the access to technology seem to play more active role through stimulated growth owing to incremental improvements in business process sophistication. This study finds that multiple factors stemming from a firm's access and use of newer forms of technology can play an essential role in generating these results, in particular the more straightforward access to finance. These findings were analyzed and interpreted under conditions that control for standard macroeconomic economic growth factors. The conclusions support policy decisions of governmental agencies that aim to improve financial support services and facilitate ease of access to cutting edge technologies.