International Journal of Business and Economics Research 2020; 9(1): 29-39 http://www.sciencepublishinggroup.com/j/ijber doi: 10.11648/j.ijber.20200901.14 ISSN: 2328-7543 (Print); ISSN: 2328-756X (Online) The Role of Financial Literacy in Resource Acquisition and Financial Performance; Moderating Role of Government Support Muhammad Ishtiaq 1, * , Yang Songling 2 , Aisha Hassan 3 , Amir Hayat 4 1 College of Economic and Management, International Faculty, Beijing University of Technology, Beijing, China 2 College of Economic and Management, Faculty of College of Economic and Management, Beijing University of Technology, Beijing, China 3 College of Economic, Northeast Agriculture University, Harbin, China 4 School of Economic and Management, Southwest Jiaotong University, Chengdu, China Email address: * Corresponding author To cite this article: Muhammad Ishtiaq, Yang Songling, Aisha Hassan, Amir Hayat. The Role of Financial Literacy in Resource Acquisition and Financial Performance; Moderating Role of Government Support. International Journal of Business and Economics Research. Vol. 9, No. 1, 2020, pp. 29-39. doi: 10.11648/j.ijber.20200901.14 Received: January 8, 2020; Accepted: February 3, 2020; Published: February 13, 2020 Abstract: Adequate resources are considered as success factors for high level of competitiveness and long term survival. However, SMEs have not enough resources which hinder their operational activities and profitability. Acquiring valuable resources has become a challenging question for owners and managers of SMEs. This research is an attempt to examine either the direct influence of financial literacy on financial performance or resource acquisition plays a mediating role. Additionally, this research tests the moderating role of government support between financial literacy and resource acquisition. To test the model, data were collected through a structured questionnaire from the emerging market of Pakistani small and medium size enterprises (SMEs) market. Hypotheses are tested through structural equation modeling (SEM) using Analysis of a Moment Structures (AMOS). The results indicate that financial literacy significantly influences resource acquisition and financial performance. Resource acquisition plays a partial mediating role between financial literacy and resource acquisition. This research recommends SMEs to gainfully employed financially educated managers for batter used and to acquire expedient resources. Moreover, this research suggests the government and controlling authority of SMEs support the firms as in accessing valuable resources that can help in high profitability. In turn, these SMEs can contribute to the development of the economy in different aspect. Further implications are discussed. Keywords: Financial Literacy, Government Support, Resource Acquisition, SMEs 1. Introduction Small and Medium Enterprises (SMEs) are considered the most significant factor of economic development, GDP growth, and poverty alleviation, etc. in developed and developing countries. They (SMEs) encompass 95% of the world businesses and contribute more than 40% to GDP worldwide [1]. For a cohesive and progressive economic structure, long term survival of SMEs is essential. A plethora of research has been conducted to distinguish factors that can facilitate the performance of firms. More precisely, various tangible and intangible resources have been discovered that can improve firm performance [2, 3, 4]. However, in the SMEs market, the acquisition of resources has become a great challenge for owners and managers [5]. Due to this, many SMEs fail in the initial stage and cannot survive for a long time [6]. Hence, SMEs need very formal strategies and policies to acquire external resources that are essential for high profitability. Some attempts have been made in this perspective to explore the factors help in acquiring valuable external resources such as networking,