Abstract
Micro, small and medium enterprises (MSMEs) are one of the important sectors in both developed and developing countries contributing to economic growth and poverty alleviation. They play a significantly important role in contributing to economic growth, with a major share of employment in Ethiopia. However, in purposively selected three Urban Administrations under the study, the sectors are not playing their essentially expected roles. This study, therefore, examined the role of local government in supporting MSMEs performance. The study employed a mixed method approach using both quantitative and qualitative data. Data required for the study are gathered from secondary and primary sources. Secondary source data are gathered from books, journals, and related earlier research outputs as well as from the regional, zonal and administrative towns archival. Primary data are gathered from extensive field works through a questionnaire survey, key informant interviews, and personal observations by employing structured and unstructured questionnaires. The sample population is identified using stratified sampling design, thus, 541 samples are identified. Furthermore, 22 enterprise owners/managers were identified purposively as a target sample for key informant interviews. Document analysis, narrative analysis, and descriptive statistics have been used to analyze the data. The findings of the study indicated that, low level of employment and capital generation of MSMEs due to ineffective local government support. This study is important to attract investment and enhance the performance of the businesses in the local area. In general, this study will be significant to enhance the economic growth of the region by creating employment to reduce the heavy burden placed on larger cities by accommodating the ever-increasing population of the region. Therefore, local government institutions should create a conducive local business environment to attract more investment and promote the existing firms’ performance.
Highlights
The decentralization of government bestowed on local government’s new roles, powers, and responsibilities, including the role of enabling the local business environment to attract investment and enhance the performance of existing firms
The study was conducted to determine the role of local government in supporting MSMEs performance in selected administrative towns of Wolaita Zone
The study generated empirical evidence that indicates how the support and guidance of local government are necessary for small businesses performance and their competitiveness
Summary
The decentralization of government bestowed on local government’s new roles, powers, and responsibilities, including the role of enabling the local business environment to attract investment and enhance the performance of existing firms. All the local governments have given responsibility to create enabling business environment in their locality to attract new business and to enhance the performance of the existing businesses Based on this decentralization program, all the development policies and strategies crafted at the federal level were cascaded at the local levels. This study sought to examine the local government and institutions support in attracting and enhancing firms’ performance in the three selected administrative towns of Wolaita zone. 3.4 Method of Data Analysis The study employed document analysis for secondary data, narrative analysis for key informant interview, and descriptive statistics for data collected through a quantitative questionnaire survey
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