Exploratory factor analysis on drivers of firm’s growth among construction SMEs in Ghana

Abstract

The growth of construction SMEs is imperative if an economy is to develop. Numerous factors influence the growth of construction SMEs due to the nature of their operation. Their growth can also be driven their activities which can be classified as internal or external. This study explored the organic (internal) factors that drive the growth of construction SMEs. To achieve the goal of the study, the exploratory factor analysis (EFA) technique was adopted. The study used a sample size of 228 out of the 315 questionnaires (a response rate of 72.3%) which were administered to a population consisting of firm owners, SME managers and construction industry professionals engaged by SMEs operating within the ten regional capitals in Ghana. The study established entrepreneurial features, firm characteristics, the business environment and stakeholder involvement as the vital factors which influence the growth of construction SMEs. Findings from the study ranked stakeholder involvement (SKI) as the most important factor in the growth of construction SMEs and the business environment of a firm (BEF) as the least important. Given the explored factors which influence the growth of construction SMEs in Ghana, the results have established their respective values for both KMO and Bartlett’s Test of Sphericity which makes the findings fit for further analytical test on firm’s growth.