“The impact of wise capital on the balanced performance of small enterprises in Iraq”

This study aims to examine the impact of wise capital on the performance of small enterprises in Iraq. Inference, innovation, social responsibility and independence are considered as wise capital dimensions. On the other hand, the financial dimension, customer dimension, learning and growth, and the operational dimension are treated as measures of enterprise performance. The study uses a sample of 207 respondents. Factor analysis and structural equation modeling were used to estimate the results. The results of the study indicate that two dimensions of wise capital, innovation and independence, have significant negative impacts on different measures of enterprise performance, but there is no evidence that inference and social responsibility affect the performance of enterprises in Iraq. This study has several contributions and implications. It contributes to the literature on wise capital and performance of small enterprises. It provides an opportunity for policy makers, regulators, academicians


INTRODUCTION
Intellectual capital tends to be an important resource and a key contributor to the economic success and value creation in a business (Alabass, 2019).Firms perceive that all types of capital, such as physical and financial capital, are vital and strategic resources for their operations because these kinds of capital represent a competitive advantage and superior performance for business enterprises (Zeghal & Maaloul, 2010) ) provided evidence of intellectual capital in different contexts, this study aims to investigate the impact of wise capital on the performance of small enterprises in Iraq.Small and medium-sized enterprises (SMEs) remained unexplored area of research in the context of wise capital and financial performance in Iraq.Accordingly, this study sheds light on the importance of wise capital dimensions for better performance of small enterprises in Iraq.and future success, small enterprises should possess managerial skills characterized by wise capital through the promotion of reasoning and insight, creativity and innovation, social responsibility, independence, and freedom.In line with the environmental progress, in particular, the technical progress, business organizations should pay attention to the quality of the human resource to achieve excellence and distinguished competence by emphasizing the importance of wise capital in enhancing performance and advancement.Therefore, this study identifies the problems small enterprises face to enhance the performance of these organizations.The significance of this study is due to the importance of its variables with a new synthesis, as this approach has not received enough attention from researchers, especially in small enterprises in Iraq, to enhance the capabilities of small business departments and increase their strengths.It also deals with modern ideas that are important for the success of contemporary enterprises in the contemporary environment.Accordingly, the aim of the study is to identify the contribution of wise capital to the performance of small enterprises.
This study has significant implications for policy makers, regulators, academicians, entrepreneurs and other parties in Iraq.It opens insights into the factors that affect the performance of small enterprises in Iraq.Regulators should give more consideration to the dimensions of wise capital, especially for enhancing the performance of small enterprises in Iraq, both inference and social responsibility.Policy makers and regulators should encourage small enterprises and give more liberal and motivating polices to enhance the performance of small enterprises.

Inference
It is a process of thinking that allows you to arrive at conclusions, generalizations, forecasts, and estimates for the purposes of analysis and creativity (Al-Azzawi, 2008, p. 5).It includes three skills, which are induction: that is, reaching a general rule of particles and special cases.The second is deduction: to reach a general rule and then apply it to particles and special cases, and finally, the conclusion: to reach a specific result from the introductions and available data.There is a set of criteria that a wise person must possess (Al-Kamari, 2012, p. 81) in the field of reasoning, which are clarity, accuracy, depth, logic, logical thinking, as well as having a far-sighted view of the consequences of things and a person's vision of future directions.

Creativity and innovation
Creativity is a pattern of thinking forward in accessing new and modern knowledge.Innovation is a new high-risk idea presented to the organization and implemented through a creative process.It can be in various types such as technological innovation through research efforts, or creativity of development processes for products, design, advertising, etc. (Dess & Lumpkin, 2005, p. 150).Al-Hariri (2012, p. 155) defines it as the ability to collect or share information in ways that lead to new ideas or a creative solution to a problem or a new idea.(Carnall, 1999, p. 83) indicates that successful organizations drive foundations of independence to workers to encourage creativity and excellence.Creativity requires a set of important qualities in the creative personality.These characteristics are audacity and fluency, resilience, adventure and risk-taking, determination, curiosity, independence, and lush imagination (Mimar, 2004, p. 115).Creativity has many forms (Al-Qaryouti, 2005): the presentation of a new idea, gathering of unconnected ideas and their transformation into a new thing, expansion of an idea that has already been proposed, quotation, imitation and elicitation from the experiences of others to show a new form of a specific situation.Whereas innovation represents collecting and producing information in a unique manner and generating an idea that a new project benefit will from its implementation.

Social responsibility
It is an expression that refers to decisions and behaviors within the organization that depend on values and ideals.The recent trend of organizations towards global competition and innovation has led to increased social responsibility as they achieve returns and profits for the organization (Ferrell & Hatline, 2005, p. 292).Today, the concept of social responsibility has become more extensive to include improving the quality of life, providing stability, and caring for all segments of society (Al-Maghrabi, 2006, p. 558).Social responsibility is defined as the performance of business in an economic, social and environmental manner provided that there is a kind of balance between the various stakeholders (Siwar & Hossein, 2009, p. 290).Through its experience in the CSR missions of organizations, the UK has identified three main skills.Firstly, business skills that include business acumen, communication skills, decision making skills, business awareness, strategic awareness, leadership, and ability.Secondly, people's skills that are the ability to adapt and empathize, develop society, integrity, political awareness, and volunteerism.Thirdly, technical skills, which include technical expertise, understanding evaluation, stakeholder dialogue, and human rights.Therefore, it is an effective tool for public relations and social stability, raising awareness, social education and raising the level of individuals, contributing to technical development, eliminating unemployment, and finally, the commitment to social responsibility leads to maximizing state returns due to organizations' awareness of the importance of fair and correct contribution to bear social costs (Al-Zubaidi, 2012, p. 12).

Independence
It means the degree to which a person can freely take important decisions.Hence, the role of wise capital in the human resource represents the elite, which represents the activity and vitality of the organization.Collins (1996, p. 30) has emphasized that the problem of contemporary organizations is how to balance the need of management to control job performance and the desire to create internal commitment among people doing the job, since the degree to which self-control is permitted is part of the management philosophy and its administrative structure.Freedom of action and independence represents the extent of the individual's freedom to choose in setting standards of behavior in choosing ways to carry out his/her work tasks according to what he/she deems appropriate (Al-Malkawi 2015, p. 58).

Performance of small enterprises
Performance measurements for small projects are used to measure results that express goals set by departments.It should be noted that the performance of small enterprises is measured by several criteria, including the efficiency and effectiveness of achieving the goals, the satisfaction of workers, the renewal of their enthusiasm and loyalty to work and their feet to face challenges, and the exploitation of opportunities, the efficiency of crisis management, and moreover, the extent of their ability to absorb the human resource and the ability to creativity and innovation.Performance indicators include three aspects.The first is the indicators measuring the effectiveness, such as accuracy, quality, and customer response speed.The second is the indicators that measure the efficiency and the level of utilization of various available resources.The third aspect includes the indicators of resilience and adaptation to the environment (Elasrag, 2012, p. 30).The profitability of an enterprise can be measured by economic indicators, including the level of productivity, technology, and turnover.
Jamil and Mohamed (2011, p. 203) pointed to a set of systems used to measure performance, including the matrix performance system, the hierarchical performance system, the integrated performance measurement system, the results system and the determinants framework that measures the performance of service industries.The balanced performance card is the measure adopted in this study.It is a method for setting balanced goals for an enterprise and then measuring it so that it achieves strategic goals through a variety of goals, including financial, operational, customer satisfaction, superiority, and growth.It relates to defining measuring and developing the performance of individuals and teams and using their performance with strategic objectives of the enterprise.
Small enterprises can only flourish in a society with an entrepreneurial spirit and a passion for self-employment.Business owners and owners of administrative talents are guided, inferred, and have long-term insights to adopt various fields in small enterprises through the availability of the spirit of creativity, initiative and innovation (O' Donnell et al., 2006, p. 98).This can happen through the introduction of new methods of work and production, new products, improvements, innovations, or the transfer of a new idea that adopts a new business, and all this requires a lot of energy and capabilities that have the ability to reason, understand, create, innovate and striving for social responsibility with a space of freedom and independence to implement a long-term vision.The human resource is a key to operating and starting enterprises of all kinds due to its capabilities to determine the behavior of investors as it represents the lightness in the intellectual movement that can change practices and thinking to obtain innovative solutions to problems.It is the behavioral component of the work (Bontis & Fitz-enz, 2002).This shows the level of performance and growth of enterprises.
They are organizations that are founded by individual or group initiatives to achieve returns and profits by providing a good or useful service to society.It includes three main elements (Afaneh & Abu Obaid, 2010, p. 1): material resources of machinery, equipment and raw materials, human resources represented by personal skills at work, and finally, the source of profit, which is the primary goal of starting the project.
The International Labor Organization defines them as small industries, which are very small units that produce and distribute goods and services and consist of self-employed independent producers.They do not practice internationalization and depend on the experienced representatives represented by the CEO and relying on their own characteristics.Moreover, they are defined as projects that combine ownership, management, success and responsibility in the person of the owner.Management often depends on the intuition, skills and training that the manager owns (Krol, 2007, p. 4).A small enterprise is defined as an organization owned and managed by one individual or a limited number of individuals.They do not control the sector in which they operate (Al-Ghalbi, 2009, p. 24).They should be within the community's need, within the legitimacy of the activity, and have clear visions.They are considered an engine of growth, a basis for competition in the market, they reduce unemployment and poverty, and work for economic and social cohesion.They can reduce costs, reflect the correct use of knowledge and innovation, and promote learn-ing and training.They are considered platforms for new ideas (Al-Azzawi, 2008, p. 55).
These projects are distinguished in the Iraqi environment with some advantages resulting from the nature of their flexibility in both management and production.The most important characteristics of these enterprises are: The years 2015-2017 saw an increase in the number of projects, as well as an increase in the total number of workers.As for the year 2018, it is noticed that there is a decrease in the number of projects by 7.6% due to a comprehensive modernization of the framework of small industrial enterprises for that year.Since 2013, the framework has not been updated due to the financial distress that the country was going through and the decrease in the percentage of workers, as well as the value of wages and benefits and the value of production, as shown in Table 1 (Central Statistical Organization, 2019, pp.6-7).
This requires a study of every variable or factor that can play a role in developing and increasing these enterprises: human resources, intellectual and wise capital, as they are real capital and the main driver of these enterprises, their role and impact in advancing these enterprises, which, in turn, contributes to raising the standard of living, reducing unemployment, enhancing the role of social responsibility towards the country, and encouraging creativity and innovation through human response.

AIM OF THE STUDY
The main aim of this study is to examine the contribution of wise capital to the performance of small enterprises in Iraq.Wise capital is measured by four dimensions, namely, inference and insight, creativity and innovation, social responsibility, and independence and freedom.Accordingly, the sub-objectives of the study are as follows: a) To study the impact of wise capital dimensions on the financial dimension of small enterprises in Iraq.
b) To study the impact of wise capital dimensions on the customer dimension of small enterprises in Iraq.
c) To study the impact of wise capital dimensions on the operational dimension of small enterprises in Iraq.
d) To study the impact of wise capital dimensions on the learning and growth dimension of small enterprises in Iraq.

HYPOTHESES OF THE STUDY
This study attempts to investigate the impact of wise capital on the performance of small enterprises in Iraq.The following are the hypotheses of the study: H 0 1: There is no significant impact of wise capital dimensions, namely, inference and insight, creativity and innovation, social responsibility, and independence and freedom, on the financial dimension of small enterprises in Iraq.
H 0 2: There is no significant impact of wise capital dimensions, namely inference and insight, creativity and innovation, social responsibility, and independence and freedom, on the customer dimension of small enterprises in Iraq.H 0 3: There is no significant impact of wise capital dimensions, namely, inference and insight, creativity and innovation, social responsibility, and independence and freedom, on the operational dimension of small enterprises in Iraq.
H 0 4: There is no significant impact of wise capital dimensions, namely, inference and insight, creativity and innovation, social responsibility, and independence and freedom, on the learning and growth dimension of small enterprises in Iraq.

RESEARCH METHODOLOGY
Figure 1 demonstrates the research framework.
The dimensions of wise capital (inference and insight, creativity and innovation, social responsibility, independence and freedom) have been regressed against the performance of small enterprises measured by the financial dimension, customer dimension, operational dimension, and learning and growth dimension.A 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree) was used to measure each variable.
A questionnaire survey has been used to collect the data required for this study.
The study examines the impact of wise capital on the performance of small enterprises in Iraq.
Accordingly, the population of the study consists of 207 respondents.A sample of the small business community in Iraq was tested with information from CSO; Directorate of Industrial Statistics for small enterprises in Iraq.Convenience sampling method was used to collect data for this study.This method is commonly used by previous research as the population of the study is large and difficult to cover.Table 2 illustrates the sample size and sampling adequacy.
The sampling adequacy has been tested using the Kaiser-Meyer-Olkin (KMO) measure.The value of KMO and Bartlett's Test is 0.944 (> 0.50), which is higher than the criterion value (0.50).This signifies that the variance proportion of the study variables are suitable with the data used by this study.Further, Chi-Square value is 18,707.479with a degree of freedom of 496 and a probability value of 1% significance (p = 0.000 < 0.01), which all signify the appropriateness of the sampling adequacy.In the same context, the reliability values have a minimum value of 0. 0.976 and a maximum value of 0.987, which indicates the fitness of the latent construct and the degree to which the items in the construct reflect the latent construct.Composite reliability values have a minimum value of 0.983 and a maximum value of 0.990, which indicates the degree to which the items in the construct reflecting the latent construct are fit.Moreover, the extracted values of the average variance, which signify the overall amount of variance in the indicators accounted for by the latent construct, have values in the range from the minimum 0.934 to the maximum 0.964, which exceeds the criterion value, 0.50 (Figure 3).

Model measurement
Discriminant validity indicates that the values exhibit the extent to which the measures are not a reflection of some other variables.Table 4 shows that each variable is significantly correlated with its related variable.This indicates that each variable is highly related to its construct.All the items represent their constructs and variables, not any other variables.This is also confirmed by the results in Table 5    demonstrate the items' effect wise on the respective construct.The results show that the items of each variable have a statistically significant effect at the level of 1% (P-Value = 0.000 < 0.01) on the respective variable, which indicates that the items are related and representing their variables.

Structural model
Structural Equation Modeling (SEM) is used to estimate the results.SEM is used to examine the effect of wise capital on the performance of small enterprises.Figure 4 provides the hypothesized structural model of this study.
The results in Table 6 provide a path analysis and hypotheses testing using SEM.The results demonstrate four models that test the impact of wise capital dimensions (inference, innovation, social responsibility and independence) on performance measures (financial dimension, customer dimension, operations dimension and learning and growth).The results in model 1 show that both innovation and independence have a statistically significant effect on the enterprise performance as measured by the financial dimension.Innovation exhibits a statistically significant negative effect on enterprise performance as measured by the financial dimension at the level of 5% (p = 0.014 < 0.05).
Hence, H 0 1 is rejected in the context of innovation and independence.Similarly, independence has a statistically significant negative effect on the enterprises' performance as measured by the financial dimension at the level of 1% (p = 0.000 < 0.01).However, there is no significant effect of inference and social responsibility on the enterprises' performance as measured by the financial dimension at any level of significance, 10%, 5%, and 1% (P-value > 0.10).Hence, H 0 1 is accepted in the context of inference and social responsibility.Overall, the value of adjusted R-squared indicates that the variables explain about 77% of enterprise performance as measured by the financial dimension.
Concerning the impact of wise capital dimensions of performance as measured by the customer dimension, the results in model 2 show that both innovation and independence have a statistically significant effect on the enterprises' performance as measured by the customer dimension.Both innovation and independence exhibit a statistically significant negative effect on the enterprise's performance as measured by the customer dimension at the level of 1% (p = 0.000 < 0.01).Accordingly, H 0 2 is rejected in the context of innovation and independence.However, there is no significant effect of inference and social responsibility on the enterprises' performance as measured by the customer dimension at any level of significance, 10%, 5%, and 1% (P-value > 0.10).Hence, H 0 2 is accepted in the context of inference and social responsibility.
Collectively, the value of adjusted R-squared signifies that the wise capital variables contribute about 75% of the variation to enterprise performance as measures by the financial dimension.
The impact of wise capital dimensions of performance as measured by the operational dimension is presented in model 3.The results show that both innovation and independence have a statistically significant negative effect on the enterprises' performance as measured by the operational dimension at the level of 1% (p = 0.000 < 0.01).Accordingly, H 0 3 is rejected in the context of innovation and independence.However, there is no significant effect of inference and social responsibility on the enterprises' performance as measured by the operational dimension at any level of significance, 10%, 5%, and 1% (P-value > 0.10).Hence, H 0 3 is accepted in the context of inference and social responsibility.Overall, the value of adjusted R-squared indicates that wise capital variables contribute about 73% to the enterprises' performance as measured by the financial dimension.6 shows the impact of wise capital dimensions of performance as measured by the learning and growth dimension.The results show that both innovation and independence have a statistically significant negative effect on the enterprises' performance as measured by the learning and growth dimension at the level of 1% (p = 0.000 < 0.01).Accordingly, H 0 4 is rejected in the context of innovation and independence.However, there is no significant effect of infer-ence and social responsibility on the enterprises' performance as measured by the learning and growth dimension at any level of significance, 10%, 5%, and 1% (P-value > 0.10).Hence, H 0 4 is accepted in the context of inference and social responsibility.In general, the value of adjusted R-squared is 76%, which indicates that wise capital variables explain 76% of the variability of enterprise performance as measured by the financial dimension.

CONCLUSION
The study examines the impact of wise capital on the performance of small enterprises in Iraq.Wise capital dimensions (inference, innovation, social responsibility and independence) are statistically functioned against enterprises' performance measures (financial dimension, customer dimension, operations dimension and learning and growth).A 5-point Likert scale ranging from 1 (strongly disagree) to 5 (strongly agree) was used to measure the variables.A questionnaire survey includes four items for each variable used to collect data.The sample consisted of 207 respondents.Factor analysis and structural equation modeling were used to estimate the results.The results revealed that both innovation and independence have a statistically significant effect on the enterprises' performance as measured by the financial dimension.Innovation exhibited a statistically significant negative effect on the enterprises' performance as measured by the financial dimension.
Similarly, independence has a statistically significant negative effect on the enterprises' performance as measured by the financial dimension.However, there was no significant effect of inference and social responsibility on the enterprises' performance as measured by the financial dimension.Concerning the impact of wise capital dimensions of performance as measured by the customer dimension, the results in the model indicated that both innovation and independence had a statistically significant effect on the enterprises' performance as measured by the customer dimension.Both innovation and independence exhibited a statistically significant negative effect on the enterprises' performance as measured by the customer dimension.However, there was no significant effect of inference and social responsibility on the enterprises' performance as measured by the customer dimension The results also show that both innovation and independence have a statistically significant negative effect on the enterprises' performance as measured by the operational dimension.However, there was no significant effect of inference and social responsibility on the enterprises' performance as measured by the operational dimension.Finally, the results showed that both innovation and independence had a statistically significant negative effect on the enterprises' performance as measured by the learning and growth dimension.However, there is no significant effect of inference and social responsibility on the enterprises' performance as measured by the learning and growth dimension.

Figure 2
Figure 2 demonstrates confirmatory factor analysis for the items used by the study through the research instrument applied.

Table 1 .
Summary of industrial statistics results for small enterprises for 2015-2018

Table 2 .
Sample and sampling adequacy Total no. of questionnaires distributed 236 (-) Uncollected 27 (-) Forms with missing data 2 Final sample 207 KMO and Bartlett's Test Kaiser-Meyer-Olkin measure of sampling adequacy 0.944 Bartlett's Test of sphericity Figure 1.Research model

Table 3 .
Validity and reliability for constructs that Figure 2. Confirmatory factor analysis Note: CA is Cronbach's Alpha, CR is Composite Reliability, and AVE is Average Variance Extracted.

Table 5 .
Item wise effect on variables

Table 6 .
Structural model