Strategic Alliance and Its Influence on the Performance of Small- and Medium-scale Enterprises in Enugu State, Nigeria

Abstract

Small- and medium-scale enterprises (SMEs) are the engine of economic growth and equitable development in emerging economies such as Nigeria. Their role in emerging market development can be seen in the areas of capital saving, utilization of local resources, and job creation among others. Enugu State is one of the emerging industrial hubs in Nigeria with SME base of 1,366. The activities of these enterprises have significantly increased the revenue base of the government, making the area an emerging market economy. This study assessed the influence of strategic alliance on the performance of SMEs in Enugu State. A quantitative approach comprising of field observations, reference to relevant literature, and questionnaire survey of 137 SMEs was adopted for the study. Data were analyzed using multiple linear regression. The results revealed that strategic alliance cumulatively led to 0.55 unit increase in sales growth, 0.58 unit increase in growth in market share, and 0.56 unit increase in product success. The result also revealed that that strategic alliance led to 0.76 unit increase in growth in profit, 0.62 unit increase in the number of employees, and 0.73 unit increase in labor productivity at 0.05 level of confidence. The article suggests that institutionalization of strategic alliance would encourage cooperation and interfirm linkages among SMEs and create a niche market for them.