Financial management determinants of revenue and employment in Albanian SMES: An empirical analysis

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Type of the article: Research Article

Abstract
Small and medium-sized enterprises (SMEs) are crucial to Albania’s economic growth and employment generation; however, their performance is hindered by weaknesses in financial management. The purpose of this study is to examine how specific financial practices determine firm-level outcomes in terms of revenue and employment. A quantitative methodology was applied, using survey data from 86 SMEs processed through correlation analysis, ANOVA, and linear regression models. The results show that business financing exerts the strongest positive effect on employment (B = 10.098), followed by accounting information systems (B = 7.3), while cash management has a negative impact (B = −5.408). Regarding revenue, business financing again demonstrates a significant positive influence (B = 1.306), with client management also contributing positively (B = 0.284). A univariate regression confirms a strong positive relationship between revenue and employment, with revenue influencing employment at a coefficient of 7.178. These findings highlight that structured financing and accounting systems are critical drivers of SME performance, while efficiency gains in cash management may reduce workforce size. The study concludes that strengthening financial governance is essential for enhancing the sustainability and competitiveness of Albanian SMEs.

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    • Table 1. Correlative bivariate relationships between the variables included in the study
    • Table 2. Bivariate correlations between dependent variables in the last three years
    • Table 3. ANOVA for linear regression with dependent variable “Employment Headcount”
    • Table 4. Linear regression coefficients with the dependent variable “Employment Headcount”
    • Table 5. ANOVA for the linear regression with the dependent variable “Revenue”
    • Table 6. Coefficients of the linear regression with the dependent variable “Revenue”
    • Table 7. ANOVA for the univariate linear regression between “Revenue” and “Employment Headcount”
    • Table 8. Linear regression between “Employment Headcount” and “Revenue”
    • Table A1. Variables, respective questions in the questionnaire, and answers with binary values
    • Conceptualization
      Bitila Shosha, Skender Uku
    • Formal Analysis
      Bitila Shosha, Armela Anamali
    • Methodology
      Bitila Shosha, Romeo Mano
    • Project administration
      Bitila Shosha, Skender Uku
    • Supervision
      Bitila Shosha, Armela Anamali
    • Writing – review & editing
      Bitila Shosha, Skender Uku
    • Investigation
      Skender Uku, Armela Anamali
    • Data curation
      Armela Anamali, Romeo Mano
    • Resources
      Armela Anamali
    • Visualization
      Armela Anamali, Romeo Mano
    • Writing – original draft
      Armela Anamali, Romeo Mano
    • Software
      Romeo Mano
    • Validation
      Romeo Mano
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Investment Management and Financial Innovations
Investment Management and Financial Innovations