Identifying the financial constraints for biotechnology firms: Linking financial literacy of management with the performance of biotechnology ventures in Malaysia

Abstract

The biotechnology industry in Malaysia has been developing and has recently become the centre of attention. However, the development and success of the sector are highly dependent on factors like financial support and the availability of resources. Therefore, the present study aimed to evaluate the impact of financial constraints and the financial literacy of management on the financial performance of Malaysian biotechnology firms. The quantitative approach was followed to develop a structured survey disseminated to the Employees of the Malaysian biotech industry. The findings revealed a significant and positive impact of management’s financial literacy on financial performance, indicating improved literacy. They have increased the financial performance of the firm. The findings also suggested that financial constraints depleted the financial performance. The study's findings offer significant empirical evidence to the existing literature on financial constraints, financial literacy, and financial performance of organizations. The findings will be helpful for the management and stakeholders of the biotech sector in improving the literacy of their employees and eliminating financial constraints for furthering the sector's development.