Strategic Resource Integration: Exploring the Role of Business Model Design, Human Capital, and Financial Capital in Startup Performance

Abstract

In this study, we study the effect of strategic resource integration, or in particular business model design, startup experience, and external financing on startup performance and working capital management in Pakistan. The study addresses a critical gap in rapidly evolving entrepreneurial ecosystem, by exploring the interaction between internal capabilities and external resources in driving financial discipline. The novel study proposes the dual-path conceptual model with performance as the mediator, and capital efficiency as potential moderator, which contributes to the discussion of the Resource Based View, Business Model Innovation and Capital Structure Theory. A quantitative, cross sectional research design was used and the data was analyzed using PLS SEM (Partial Least Squares Structural Equation Modeling) as the data analysis technique. Survey in the form of structured Likert scale questionnaire was led on 300 startup founder and financial officer from Pakistan’s fintech, e-commerce and services sectors. Variation in key constructs included efficiency-centered and novelty-centered business models, startup experience, external financing, capital efficiency, performance and working capital management. In order to test the reliability of measurement and the validity of the model, Cronbach's Alpha, Composite Reliability and AVE were used. Results show that all independent variables significantly influence (R2 = 0.64) and performance strongly predicts (β = 0.71, R2 = 0.50) working capital management. However, the effect of capital efficiency on moderation was statistically insignificant (β = 0.01), which means that it is a practical but not a statistical one. Hypotheses H1–H9 were supported; H10 was not. This is an empirically validated framework to link strategic design with financial control, in which this research contributed. As such, it implies for entrepreneurs, investors and policymakers as well as for future longitudinal or sector specific research in emerging markets.

Keywords -Startup performance, Business model design, Working capital management, Capital efficiency, Strategic resource integration, PLS-SEM, Entrepreneurial finance