Abstract
The paper looks at the relationship between the performance of small and medium-sized enterprises (SMEs) in the tourism sector of Uganda and firm characteristics and business environment. Data were gathered after administering questionnaires to 1690 SMEs located around tourist attractions throughout the country in 2018. The study uses quantile regression to analyze the determinants of firm performance. The findings indicate that entrepreneur/managers education, business experience, initial capital, business registration and age of the owner are important in explaining enterprise performance. We also find that male managed enterprises outperform those managed by female. The study suggests that providing easy access to credit for initial capital and easing the business registration process and training entrepreneurs/managers will increase performance of SMEs in the tourism industry.
Highlights
In many developing countries, the contribution of Small and Medium Enterprises (SMEs) includes employment creation, increased output, promotion of exports, fostering entrepreneurship and higher economic growth
We examine the determinants of performance of enterprises in Uganda’s tourism sector, using primary data collected from enterprise owners/managers from all regions of the country
We analyzed the determinants of performance of small and medium-sized enterprises (SMEs) in the tourism sector in Uganda
Summary
The contribution of Small and Medium Enterprises (SMEs) includes employment creation, increased output, promotion of exports, fostering entrepreneurship and higher economic growth. Entrepreneurship plays a key role in the tourism sector due to its social, economic and environment impacts. Tourism creates employment especially to the youth and women and a source of foreign exchange to a country. SMEs play a big part in furthering innovation and prosperity (McIntyre, 2000) and for making new products and services available to consumers and contributing significantly to Gross Domestic Product (GDP). The SME sector is one of the sources of hope in bringing transformation to stunted growth, a move which will improve overall living standards of the population. It is critical that the entrepreneurial firm’s dynamics are well understood to better guide entrepreneurial decisions and policy formation in the areas that are economically underdeveloped or depressed
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