This paper examines the relationship between investment and business performance in Malaysian SME family businesses. The study employed a structured questionnaire with close-ended questions to collect data from 399 respondents using a random sampling approach in Perlis, Kedah, Kelantan, and Terengganu. Descriptive statistical analysis and Pearson Correlation analysis were used to analyze the data with SPSS software. The results reveal a positive relationship between investment decisions and business performance in Malaysian SMEs' family businesses. These findings clearly show that investment is an important indicator for identifying the business performance of Malaysian SME family businesses to improve future business performance. Finally, business owners can promote growth by making smart investment decisions and finding expansion prospects. The theoretical contribution of this study follows the Pecking Order Theory (POT) (Myers, 1984) and the resource-based view (RBV) theory (Wernerfelt, 1984), where psychological factors influence individuals' investment decisions. The results of this study contribute theoretical and practical. With all the contributions, the stakeholders can make the right investment decisions for their businesses and, at the same time, will increase business performance.
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