Research Article 10
Journal of Finance & Economics Research - Volume 11, Issue 1 2026
By Suresh Kumar, Syed Muhammad Shoaib Wasim, Dr shahid Mehmood
https://doi.org/10.20547/jfer2611103
Keywords: Sustainable finance, Female empowerment, Political stability, Institutional quality, Pakistan

The aim of this research is to examine how internal financial management techniques are associated with better financial performance for small and medium-sized enterprises (SMEs) in Pakistan. The research is theoretically informed by management control and contingency theory and seeks to examine the impact of sophistication in budgeting and management control systems on financial performance for SMEs in Pakistan. Financial decisions’ quality is considered as a mediator between management control systems and financial performance. Moreover, it also seeks to examine if competitive intensity moderates the relationship between financial decisions’ quality and financial performance. Data for this research is collected from Pakistani SMEs using survey research and were analyzed through structural equation modeling. The research findings reveal that sophistication in budgeting and management control systems improves financial decisions’ quality, which in turn improves financial performance. Competitive intensity also moderates the relationship between financial decisions’ quality and financial performance for Pakistani SMEs. The research underlines the importance of decisions’ quality as an internal mechanism for achieving better financial performance for Pakistani SMEs.

Submission Date: 25 Mar, 2026 Reviews Completed: 19 May, 2026
Acceptance Date: 9 Jun, 2026 Publication Date: 30 Jun, 2026