Financial Decision-Making and SME Growth in China: The Mediating Role of Corporate Culture

This study delves into the intricate relationship between financial decision-making and the growth of small and medium-sized private enterprises (SMEs) in China, emphasizing the mediating role of corporate culture. Through a comprehensive analysis of data collected from 405 SMEs via a questionnaire survey, this research employ multiple regression analysis to test the hypotheses. The findings underscore the significant influence of corporate culture, which categorize into four dimensions: values, relationship culture, innovative culture, and risk culture. These cultural aspects shape financial decision-making processes, subsequently impacting SME growth as measured by profitability, development scale, and growth stage. Notably, financial stability emerges as a pivotal factor; more aggressive financial strategies are associated with higher profitability but may result in a smaller development scale and lower growth stage. This research not only contributes to the existing literature by elucidating the complex interplay between corporate culture, financial decision-making, and SME growth within the Chinese context but also offers practical insights and strategies for SME managers seeking to optimize their financial decisions and foster sustainable growth.