THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN YEMEN: A CROSS-SECTIONAL STUDY

Abstract

Due to the importance of the contribution of Small and Medium Enterprises (SMEs) towards development worldwide, researchers in different contexts have investigated the development of SMEs and how economic development can be driven forward by supporting the SME sector. However, when it comes to lower-income economies, literature is scant in investigating the performance and the development of the contribution of SMEs towards economic development in lower-income economies. Hence, the aim of this article is to explore the extent and status of small and medium enterprises in Yemen as a lower-income economy and how their performance varies according to their characteristics. The article adopts cross-sectional quantitative methodologies, it relies on primary data collected conveniently from 400 owners and managers of manufacturing SMEs in Yemen. Descriptive analysis is used to explore the extent of SMEs' performance, and further, variance analysis using Independent Sample t-test and One Way ANOVA in order to explore the variance in the performance according to the variance of enterprise characteristics. The findings indicated a low extent of business performance among manufacturing SMEs, where the mean score of the overall extent ranges from 4.94 to 5.06 out of 7. Further, The result of running One Way ANOVA revealed that the scope of operation, age, and position of managers, in addition to owning a share of enterprises, significantly contribute to the variance in the business performance among manufacturing SMEs (P < 0.05). These results can benefit the managers and owners of SMEs in Yemen and other similar economies by focusing on the extent of performance that their management can target. The implication of this research is summarized by discussing the performance of SMEs in lower-income economies to draw the attention of authors and scholars toward investigating the role and contribution of SMEs in economic development and welfare in lower-income economies.