Human Resource Strategies as Governance-Enabling Mechanisms for SME Financing Outcomes: Evidence from Jordanian SMEs
Abstract
This study examines how human resource strategies contribute to financing outcomes among small and medium-sized enterprises (SMEs) in Jordan. Drawing on the resource-based view, agency theory, information asymmetry theory, and SME financing literature, the study conceptualizes human resource strategies as internal organizational capabilities that may strengthen governance-related capabilities and enhance the credibility of SMEs in external financing relationships. Data were collected through a structured survey administered to 159 SME managers and decision-makers in Jordan. The study applies partial least squares structural equation modeling (PLS-SEM) and supplementary robustness diagnostics based on construct scores. The findings indicate that human resource strategies are positively associated with SME financing outcomes and with the development of strategic HR capabilities, governance knowledge, and governance leadership. The originally tested moderation effect of governance capabilities is not supported in the PLS-SEM results. Additional mediation-oriented diagnostics suggest that governance-related capabilities and strategic HR capabilities provide a more theoretically plausible explanation of how human resource strategies are linked to financing outcomes. The study contributes to SME finance and governance research by clarifying how internal organizational capabilities may reduce information asymmetry and support financing access in an emerging economy context. The findings should be interpreted cautiously because the study is cross-sectional and relies on self-reported survey data.