Document Type : Research Article


Faculty of Business and Management, Universiti Sultan Zainal Abidin, Malaysia,


Small and medium-sized enterprises (SMEs), especially their business risks and performance, are the primary economic drivers of the construction sector in Malaysia. Most studies focused on the performance of SMEs, but their business risks were underexplored. With that, the current study aimed to determine the elements of business risks that affect the performance of SMEs in the construction sector within the Malaysian context. For this study, five construction companies in different states were selected as case studies. Financial risk, government regulation, managerial capacity, delay in the project, and technology were identified as the critical elements of business risks that affect the performance of SMEs. Through the emerging new ventures in the business market, the performance of SMEs is undoubtedly one of the vital economic drivers that can boost the country’s economic growth.


Main Subjects

  1. Aziz, K. A., Yazid, A. S., Mahmod, M. S., Rashid, N., Salleh, F., Ghazali, P. L., & Mahmood, S. (2018). Enterprise Risk Management (ERM) Practices among Malaysian SMEs: The Three Steps Process to identify Adopters and Non-Adopters of ERM for SMEs. International Journal of Academic Research in Business and Social Sciences, 8(11), 1231–1245
  2. 2.       Abebe, Michael. (2014). Electronic commerce adoption, entrepreneurial orientation and small- and medium-sized enterprise (SME) performance. Journal of Small Business and Enterprise Development. 21. 10.1108/JSBED-10-2013-0145.
  3. 3.       Ayyagari, Meghana; Demirguc-Kunt, Asli; Maksimovic, Vojislav. 2011. Small vs. young firms across the world: contribution to employment, job creation, and growth (English). Policy Research working paper; no. WPS 5631. Washington, DC: World Bank.
  4. Bruns, Volker & Fletcher, Margaret. (2008). Banks' risk assessment of Swedish SMEs. Venture Capital. 10. 10.1080/13691060801946089.
  5. Baraka, Haytham. (2019). Risk in The Construction Industry. Current Trends in Civil & Structural Engineering. 2. 10.33552/CTCSE.2019.02.000541.
  6. Bianchi, Constanza & Glavas, Charmaine & Mathews, Shane. (2017). SME International Performance in Latin America: The Role of Entrepreneurial and Technological Capabilities. Journal of Small Business and Enterprise Development. 24. 10.1108/JSBED-09-2016-0142.
  7. Burhan, N. A. S., Che Razak, R., Salleh, F., & Labastida Tovar, M. E. (2017). The higher intelligence of the ‘creative minority’ provides the infrastructure for entrepreneurial innovation. Intelligence, 65, 93–106. Scopus.
  8. Curran, J (2006). Specificity and denaturing the small business, International Small Business Journal, vol. 24, no. 2, pp.205-210.
  9. Daud, W. N. W., Zainol, F. A., Salleh, F., Yazid, A. S., Ismail, S., Markom, R., & Mukhtar, N. D. (2017). Takaful rules and regulations for ASEAN countries: Takaful player perspectives. 2017-January, 2363–2369. Scopus.
  10. Delerue, H. and Perez, M. (2009), Unilateral commitment in alliances: an optional behaviour, Journal of Management Development, Vol. 28 No. 2, pp. 134-149.
  11. Eriotis, N. P., Franguoli, Z., & Neokosmides, Z. V. (2002). Profit margin and capital structure: An empirical relationship. The Journal of Applied Business Research, 18, 85-89.
  12. 12.    Edward I. Altman, Gabriele Sabato, Nicholas Wilson (2010). The Value of Non-Financial Information in Small and Medium-Sized Enterprise Risk Management. The Journal of Credit Risk, 6, 1-33.
  13. Fadzil, A. F. M., Salleh, F., Yaacob, M. R., Yazid, A. S., & Sallehudin, H. (2020). The inclinations of entrepreneurial cognition and competencies: The case study of successful e-commerce new venture creation in Malaysia. International Journal of Scientific and Technology Research, 9(3), 4471–4474.
  14. Felipe Hernández-Perlines, Antonio Ariza-Montes & Luis Araya-Castillo (2019). Socioemotional wealth, entrepreneurial orientation and international performance of family firms, Economic Research-Ekonomska Istraživanja, DOI:10.1080/1331677X.2019.1685398
  15. Hooi, Carol. (2006). Implementing e-HRM: The Readiness of Small and Medium Sized Manufacturing Companies in Malaysia. Asia Pacific Business Review. 12. 465-485. 10.1080/13602380600570874.
  16. Jebna, AKK & Baharudin, AS (2013). Factors affecting small and medium enterprises success: An exploratory study, Jurnal Teknologi, vol. 64, no. 3, pp.69-72.
  17. Lwango, Albert & Coeurderoy, Régis & Giménez Roche, Gabriel. (2017). Family influence and SME performance under conditions of firm size and age. Journal of Small Business and Enterprise Development. 24. 10.1108/JSBED-11-2016-0174
  18. Mironiuc Marilena, Taran Alina (2015). The Significance of Financial and Non-financial Information in Insolvency Risk Detection, Procedia Economics and Finance. Volume 26, 750-756,
  19. Mutezo, Ashley. (2013). Credit rationing and risk management for SMEs: The way forward for South Africa. Corporate Ownership and Control. 10. 153-163. 10.22495/cocv10i2c1art1.
  20. Myers, S. C. (2001). Capital structure. Journal of Economic Perspectives, 15(5), 81-102.
  21. 21.    Norasikin Salikin, Nurailis Ab Wahab, Izlawanie Mohd (2014). Strength and Weaknesses among Malaysian SMEs: Financial Management Perspectives Procedure – Social and Behavioural Sciences, 129, 334-340
  22. Omerzel, Doris & Antoncic, Bostjan. (2008). Critical Entrepreneur Knowledge Dimensions for the SME Performance. Industrial Management and Data Systems. 108. 1182-1199. 10.1108/02635570810914883.
  23. Rashid, N., Daud, W. N. W., Zainol, F. A., Salleh, F., Yazid, A. S., Endut, W. A., Abdullah, B. (2018). The Uses of Financial Reporting Standard for Small Medium Enterprise Companies. International Journal of Academic Research in Business and Social Sciences, 8(11), 1331–1338.
  24. Salleh, F., Ibrahim, M. D., Yazid, A. S., Awang, Z., Afthanorhan, A., Rashid, N., & Ghazali, P. L. (2018). Micro Small and Medium Enterprise Demand for General Takaful: Proposed Theoretical Framework and Hypotheses Development. International Journal of Academic Research in Business and Social Sciences, 8(12), 599–612.
  25. Salleh, F., Ibrahim, M.D., Redzuan, R.H & Remli, N., (2017). Developing a Takaful Property Framework for Small and Medium Enterprises. World Applied Sciences Journal 35 (8): 1602-1609
  26. Salleh, F. & Ahmad Saufi, N.F., (2020). Is the Introduction of National Plan of
    Coastal Erosion Takaful Scheme Necessary? Journal of Advanced Research in Dynamical & Control Systems, Vol. 12, No. 5: 47-53
  27. Salleh, F., Mustafa, N., Burhan, NAS., Hamzah, AH., Norfadzilah, R., & Sha'aban, MM., (2020). B40 Health Micro Takaful’s Working Framework in Malaysia.  The Journal of Research on the Lepidoptera, Volume 51 (1): 246-253
  28. Salleh, F., Binti Yaakob, N. H., Arumugam, N., Yusof, N. B., & Binti Ali, A.-A. R. E. (2012). Perceptions of IT knowledge among SMEs operators in Malaysia. Asian Social Science, 8(10), 68–75. Scopus.
  29. Sukumar, Arun, Edgar, David and Grant, Kevin (2011) An Investigation of E-Business Risks in UK SMEs. World Review of Entrepreneurship, Management and Sustainable Development, 7 (4). pp. 380-401. ISSN 1746-0573
  30. Wang, Yang & Wang, Wenchun & Wang, Jiaojiao. (2017). Credit Risk Management Framework for Rural Commercial Banks in China. Journal of Financial Risk Management. 06. 48-65. 10.4236/jfrm.2017.61005
  31. Yazid, A.S., Tengku Adnan, T.F.F., Salleh, F., Ghazali, P.L., & Mahmud, M.S (2020). Disaster Resilience: Community and Stakeholder Perspective. The Journal of Research on the Lepidoptera. Volume 51 (2): 87-105
  32. Yazid, A.S., Arifin, A., Salleh, F., Ghazali, P.L., & Mahmud, M.S (2020). Determinants of Family Takaful Loyalty in Malaysia: An Exploratory Factor Analysis. Journal of Advanced Research in Dynamical and Control Systems. Volume 12 (4): 291-298. DOI: 10.5373/JARDCS/V12I4/20201443