Does market performance mediates the nexus between production performance and financial performance in manufacturing companies?

Purpose Based on recent government reports, the manufacturing industry is considered one of the most important sectors in Palestine. In this sense, this empirical study aims to investigate the influence of production performance on financial and market performances, assess the influence of market performance on financial performance and test the mediating role of market performance on the relationship between production and financial performances. Design/methodology/approach A convenience sampling method was applied. Accordingly, a set of questionnaires was distributed to 384 managers at Palestinian manufacturing enterprises. Structural equation modelling (SEM) was applied to analyse the collected data. Findings The study findings unveiled that production performance directly positively has a positive and direct influence on the financial and market performances. Furthermore, the result revealed that financial performance is positively affected by market performance level, whereas market performance has a partial mediation role in the relationship between financial and production performances. Research limitations/implications The study designs are restricted to the manufacturing companies. Hence, the empirical results may not generalise to the other industries. Practical implications The findings of this study can draw responsible parties and firms' top management attention in developing countries to the importance of market performance as a key pillar of firm performance. Originality/value To the best of authors' knowledge, most of the prior contemporary studies have been restricted to examine the direct relationship and have not considered the mediating influence of market performance. Besides, this study emphasised the inter-relationships between the firms' performance dimensions. This study contributes to manufacturing firms' performance literature by providing further validation of the performance scales from a developing countries "Palestine" with unique business environment because it is under ongoing occupation.