Abstract
Small–medium-sized forest enterprises (SMFEs) have historically played an essential role in developing countries’ economies worldwide because most businesses start as small businesses, and government support and knowledge-based recourse are critical to the sustainable development of SMFEs and local economies. The current studies examined the effects of the Khyber Pakhtunkhwa (KPK) government’s (Pakistan) support (GS) and entrepreneur knowledge (EK) on the development of small–medium-sized forest enterprises (SD) and their contribution to the local economic development (LED) of the region. Primary data were collected from 350 SMFEs in KPK, Pakistan. The model was developed by using a structural equation model (SEM) to investigate the impact of GS, EK, and SMFEs on the growth, SG, and sustainable development of the local economy. This study concludes that EK and GS could increase growth in SMFE businesses and contribute to LED. On the other hand, crediting loans and equipping businesses with training could not directly affect SMFE businesses and LED growth. The government needs to use natural resources and the SMFE communities as leaders among suppliers in the local market for the sustainable development of LED and SMFEs, alongside focusing on preserving and taking initiatives to develop. This study discusses several practical implications for policymakers, business owners, and academics, with recommendations for future research.
Highlights
Introduction iationsOver recent decades, researchers, economists, policymakers, and entrepreneurs have agreed that Small–medium-sized forest enterprises (SMFEs) are an instrument of economic growth and poverty reduction [1,2].The SMFE sector plays a crucial role in local economic development as a major source of livelihoods in the rural and less developed regions of a country [3,4]
The findings show that government’s (Pakistan) support (GS) and entrepreneur knowledge (EK) have a positive effect on local economic development and SMFE development
This study was undertaken to check the indirect effect of entrepreneur knowledge, government support, and SMFE development on local economic development
Summary
The SMFE sector plays a crucial role in local economic development as a major source of livelihoods in the rural and less developed regions of a country [3,4]. They contribute to a country’s business growth through job creation, developing entrepreneurship skills, generating high production volumes, increasing country exports, and generating income within rural poor and less developed regions in developing countries [5,6,7]. The active role of SMFEs in emerging economies ensures SMFEs act as engines through which economic growth, poverty reduction, and alleviation objectives of the Millennium Development.
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