Effect of Bootstrapping dimensions moderated by Cost of Doing Business on Performance of Small and Medium Scale Enterprises (SMEs) in South-West, Nigeria

Abstract

The role Small and Medium Scale Enterprises (SMEs) can never be overemphasised in the has economic drivers in either developed and developing countries of the world. However, contract to immense contribution of SMEs to nation economic growth, most SMEs in Nigeria struggle to survive beyond five years due to poor performance. The major challenge SMEs in Nigeria include developing creative ways of acquiring resources in non-traditional ways cum cost of doing business which to greater extent affect SMEs performance. Thus, this study investigated the effect of Bootstrapping dimension moderated by cost of doing business on the performance of Small and Medium Enterprises in South-West, Nigeria. The study adopted survey research design and the population of the study comprised 14, 527 owner/managers of small and medium scale enterprises (SMEs) enterprises in Lagos and Oyo States. The study utilized stratified simple random sampling technique with a sample size of 750 owner/managers of SMEs determined using Cochran’s (1977) formula and data were analyzed using regression analyses. The findings revealed that cost of doing business (β = 0.003, ΔR2 = 0.021, ΔF = 14.820, p < 0.05) significantly moderated the effect of bootstrapping measure by owner’s financing, subsidy financing, delayed payment, joint utilization, and social capital on the performance of SMEs in South-West, Nigeria. The study concluded that bootstrapping improved performance of SMEs in South-West, Nigeria, cost of doing business significantly moderated effect of bootstrapping on the performance of SMEs in South-West, Nigeria. It was recommended that management of small and medium scale enterprises in South-West, Nigeria should pay more attention on subsidy financing, delayed payment, social capital with less attention on joint utilization in order to improve their performance. Keywords: Cost of Doing Business, Delayed Payment, Joint Utilisation, Owner Financing SME Performance, Social Capital, Subsidy Financing