A Study on the Relationship Between the Satisfaction of Cost Reduction and Business Performance on the Small Business : Focus on a Moderating Effect of Government Sponsored Business

This paper examines an association of business performance with the satisfaction of SMEs' cost reduction and government's support policies. Especially, we examine whether the satisfaction of government's support policies plays a role of a moderating effect on business performance. We provide two main sets of insights. First, we find that the satisfaction of a cost reduction factor 1(motivation ability, ability of internal process efficiency, and satisfaction of customer response ability) and that the satisfaction of a government's support business factor 1(standard for a reasonable profit and unit cost, satisfaction of support policy for high-quality labor and technical development) have a positive effect on business performance. Second, we find that the government's support policies, which are a government's support business factor1, have a moderating effect and play an important role in enhancing business performance of SMEs. Our Factor Analysis indicates that we have to consider the moderating effect of government's support policies and the factors of cost reduction that affect business performance.