Behavioral Factors Influencing SME Financial Performance: Financial Decision-Making, Communication, and Advisory Support in Oman

Abstract

This study examines how financial decision-making (FDM) and financial communication (FC) affect the financial performance of small and medium enterprises (SMEs) in Oman, drawing on Behavioral Finance. It also explores how Financial Behavior (FB) acts act as mediator and how access to financial advisory services (AFAS) influences these relationships. The research used a quantitative cross-sectional design, collecting data from 384 SME owners and managers across different sectors in Oman. The analysis was done with Partial Least Squares Structural Equation Modelling (PLS-SEM). The results show that financial decision-making and financial communication both play a key role in improving SME financial performance. Financial behavior partially mediates the relationship between financial decision-making, financial communication, and SME financial performance. This suggests that disciplined financial practices are essential for turning financial strategies and communication into better organizational results. This study adds to research on Behavioral finance and SMEs by offering evidence from an emerging economy. It highlights how behavioral discipline, clear communication, and advisory support help make SMEs more financially sustainable.