Growth Of Small And Medium Enterprises Research Articles

SME growth speed: The relationship with board capital

ABSTRACT This study examines the effects of board capital on small and medium enterprise (SME) growth speed using a robust regression model, in a sample of the every firm listed on the MAB (alternative Spanish stock market). We adopted the resource-based view (RBV), the resource dependency perspective, and the Penrosean theory to argue that directors’ characteristics provide the resources required for SMEs to achieve a higher growth rate. Our research concludes that the board’s functional diversity positively affects SME growth, the extent of prior training among the directors of quoted SMEs is higher than expected, and there is no relationship between the previous experience of directors in CEO positions and SME growth.

Understanding the Economic Linkages among Small and Medium Enterprises, Economic Growth, and Employees in Malaysia

This paper investigates the linkages among economic growth, small and medium enterprises (SMEs) and employees in Malaysia. It uses the total number of SME employees as a third variable to be associated with economic and SME growth using a panel dataset covering the period from 1998 to 2017. There are five main economic sectors in Malaysia: agriculture, construction, mining, manufacturing and services. The aim of the paper is to provide a better understanding of the relationship between SMEs, economic growth and the number of employees in the different sectors. Our findings indicate various causal relationships among the three variables in different sectors. The results of the study found that Malaysian economic growth contributed to the growth of the SME sector. In contrast, it showed that the growth of the SME sector only contributed to the growth of the manufacturing industry. The information gained will be useful for policymakers and help the government to plan for the future of the country by focusing on worthwhile activity.

Taxation and the Growth of Small and Medium Enterprises in Nigeria

This study examines the impact of taxation on the growth of Small and Medium Enterprises (SMEs) in Nigeria from 2007 to 2019. Data was gathered from the Central Bank of Nigeria Statistical Bulletin and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). The study adopted the co-integration and error correction modelling as its technique of analysis. While Company Income Tax (CIT) and Value Added Tax (VAT) were found to have significant impact on the growth of SMEs in Nigeria, Custom and Excise Duty (CEDT) was found to have insignificant impact on their growth. As expected however, the three variables, CIT, VAT and CEDT were found to be inversely related with SMEs growth. The study therefore recommends among others, that for taxation to grow the SMEs, tax policies especially those relating to CIT and VAT should be properly formulated and carefully administered in such a way that such policies directly promote the growth of SMEs. In particular, the government should consider a downward review of the current VAT rate of 7.5%. In addition to reducing tax rates for the SMEs, other incentives, reliefs and allowances such as loss reliefs, pioneer status, tax holidays, capital allowance etc. should be specially packaged for SMEs to enhance their productivity and growth.

Financial Constraints and Small and Medium Enterprises: A Review

We review the literature on financial constraints and the performance of small and medium enterprises (SMEs). We consider the important role that SMEs play in the economies of Australia and the Organisation for Economic Cooperation and Development. We examine the role of financial constraints in SME growth, with emphasis on business cycles and credit access. We discuss issues that SMEs face in accessing financial resources for expansion. We look at the literature that evaluates the impact of financial constraints on key outcomes: employment, productivity and wages. We review key policy debates and consider where government involvement might be appropriate.

SMEs in Cambodia

ABSTRACT Small and Medium Enterprises (SMEs) drive industrial progress, improve an economy’s ability to deal with shocks and are recognized as breeding grounds of innovation which is a crucial part of the Cambodian economy, contributing to both economic and social development. SMEs play an important role in: (i) creating jobs (ii) generating income for low-income people and vulnerable populations, and (iii) fostering economic growth, social stability, and contributing to the growth of a dynamic private sector. This paper focus on the production issues only where it aims to find factors affecting the growth of SMEs, that are divided into three folds such as technology, labor force, and capital. The research will employ the grounded theory as methodology. However, SMEs have many challenges. Access to finance is still the main issue while SMEs bank has been established. Technical knowledge and skills are the main issues for labor including migration problems. Technology updated is still limited for growing SMEs. Keywords: Small Medium Enterprise; SMEs; production issues; labor force; capital

Associating MFIs with SMEs to Assist Post Pandemic Economic Resilience in Bangladesh

Small and Medium Enterprises (SMEs) are one of the major sources of economic growth. Recent economic growth and development of Bangladesh have been highly linked with the flourishment of SMEs. Access to formal finance is one of the major impediments for the growth of SMEs. The recent economic slowdown due to the COVID-19 pandemic causes the SMEs to suffer to remain in the business. Supply chain disruption, unsold products, lack of product demand, liquidity crisis become more severe in this case. The government of Bangladesh is trying to help SMEs by providing funds through the banking sector but previous studies show the banking sector is not as effective for SME financing. Besides recent banking sector performance seems to be very poor. Therefore, to ensure the best use of funds we need an alternative channel. Mico-Finance Institutions (MFIs) can play a better role in this case. Several studies have shown microfinance was a successful tool to recover small businesses after natural disasters. This paper aims to address the role of microfinance to post-disaster SME financing and identifies the current gap between these two.

Internal Control and SMEs’ Sustainable Growth: The Moderating Role of Multiple Large Shareholders

Small and medium enterprises (SMEs) face more risks for sustainable growth due to a lack of resources than large firms in emerging economies. Hence, it is more likely for SMEs to look to risk management for survival in turbulent markets. As a tool of risk management, whether internal control indeed has contributions to the sustainable growth of SMEs, particularly conditional on multiple large shareholders, is empirically unexplored. Using a sample of SMEs listed in China, this study examines the relationship between internal control and sustainable growth, and assesses a moderating role of multiple large shareholders. The results show that effective internal control significantly promotes SMEs to achieve sustainable growth, and the effect is moderated by multiple large shareholders, suggesting that the role of internal control is more prominent in SMEs with multiple large shareholders. These results are robust to a battery of sensitivity tests. This study extends the literature by providing empirical evidence on the role of internal control in SMEs’ sustainable growth.

SME Growth in a Recession: What Does a Growing Business Tell?

This article talks about growing small businesses in a recession and examines management strategies that made the company grow. Recessionary periods are accepted tough for small and medium enterprises (SMEs) to survive and grow, yet some do. SME performance is discussed associating with different factors including barriers, business characteristics, owner-manager lifestyle and networks. Prior studies have a significant contribution in exploring aggregate SME growth phenomena, but there is a little understanding of how SMEs grow in the recessionary periods. This study used a pluralist methodology with the participant action research as a primary approach, case study as a design and mix-method strategy to collect and analyse data. The research is dominant by qualitative research where such data were collected from a series of informal interviews and observation. Similarly, quantitative data such as business records and financial information were gathered from primary and secondary sources. The case study firm implemented two management strategies: learning in the organisation and restructuring the organisation to achieve growth during the recession of 2008-2009. Even though the precise impact of these strategies is challenging to establish, both learning and restructuring strategies were making the firm grow in the recession of 2008-2009. Since SMEs operate in a context, any “ready-to-use” and “one-size-fits-all” strategies and advice do not help individual businesses grow. This paper will be of interest to all the people who are involved in making the SMEs grow in recessionary periods.

Role of SME in Poverty Alleviation in SAARC Region via Panel Data Analysis

The key objective of the formation of the South Asian Association of Regional Cooperation (SAARC) is to join hands collectively for slow economic growth, poverty eradication, deprived health and education sectors. In the 12th SAARC Summit, it has been declared that poverty eradication is the main area of concentration and SAARC countries would strive their best to minimize all types of poverty with the help of any possible strategy. The main objectives of the current study are to evaluate the development of the agenda of poverty eradication in SAARC countries through small and medium enterprise (SME) development because it would be considered as a short-routed remedy to mitigate poverty. The poorest 20% income holder as a percentage of GDP has been used as the proxy for poverty in the SAARC region. SME development has been measured through the SME share in GDP in respective countries. The panel dataset has been developed for the period of 1990 to 2015. The fixed effect method (FEM) and regression equation techniques were used to analyse the observed data. The results of the FEM were misleading. The regression equations for the respective countries were used for empirical analysis. The results have identified that there are three main factors that are essential in reducing poverty in the SAARC region: SME growth, openness of trade and social sector development.

A Review of Factors Affecting the Growth of Small and Medium Enterprises (SMEs) in Tanzania

The growth of Small and Medium Enterprises (SMEs) globally is dependent upon a conducive business environment. However, in Tanzania, SMEs face several constraints such as limited finances, poor market accessibility, low entrepreneurial knowledge and bureaucracy which hinders their growth. This paper aims to assess the factors impeding the growth of SMEs in Tanzania. Factors such as a lack of business training, capital constraints, a lack of finance, poor infrastructure, a lack of collateral, poor production, poor technologies, tight regulations, corruption, poor market accessibility, the motivation of the business owners, limited access to information, a lack of human competencies and inadequate raw materials were measured. A mixed-method approach was used in this study, inclusive of content analysis to extract the constraints from the 21 items of literature in Tanzania. Thereafter, a quantitative approach was applied where descriptive statistics were used to determine the frequency and percentage of the factors in order to extract the most significant variables affecting SME growth in Tanzania. The findings reveal that Tanzanian SME growth is mostly impacted by financial constraints, capital constraints, poor technology and tight regulations. The study recommends that financial assistance through lowering the interest rates and simplifying the borrowing procedures must be given to SMEs to enable them to avail the necessary finance and capital for their business Also the government must support SMEs by simplifying the regulations for SMEs such as levying taxes. Business training must be provided to the SMEs by government organisation such as the Small Industries Development Organisation (SIDO) to facilitate business knowledge. Keywords: SME, challenges, growth. DOI : 10.7176/EJBM/11-33-01 Publication date: November 30 th 2019

The Impact of Microfinance Banks on the Growth of Small and Medium Enterprises in Lagos Metropolis

Small and Medium Enterprises (SMEs) play a major role in the Nigerian economy, especially in terms of Employment, growth, productivity, and poverty alleviation. The purpose of this study was to examine the impact of Microfinance Banks (MFB) on the growth of SMEs in Lagos metropolis The data for this study was collected via questionnaires given to the owners of SMEs that had accounts with microfinance banks in Lagos metropolis. Out of 209 questionnaires distributed, 205 were viable and analyzed using the SPSS package. The questionnaire contained 2 sections. Section 1 for general information while section 2 contains questions on effects of micro-savings on financial performance, effects of microcredit on the financial performance of the SMEs, effects of training on the financial performance of the SMEs and financial performance. The outcome revealed that the savings among SMEs are encouraging because of higher interest rates compared to deposit banks, faster loan disbursement, failure of MFBs to conduct training for SMEs, while the majority of SMEs experienced financial growth using MFB products. Keywords: Small business, Microfinance banks, SME growth, Lagos metropolis

Investigating the Impact of Entrepreneurial Infrastructure Deficit on Firm Growth

Small and medium enterprises (SMEs) in Nigeria are suffering from a deplorable condition of entrepreneurial infrastructure (EI) which is evidenced in the myriad of challenges bedevilling their growth and development. This study therefore aims to investigate the impact of EI deficit on firm growth, focusing on the growth of SMEs in Nigeria. This was done through a critical review of extant literature (peer reviewed journal articles) on EI which were obtained from reputable data bases and broken down into two basic components of infrastructure (physical and non-physical infrastructure). Empirical findings revealed that the availability of physical infrastructure (constant water supply and good road infrastructure) and the non-physical infrastructure (electricity, government policies/programmes, access to financial support services, incubation centers/platforms, business clusters and entrepreneurship training) improves productivity, profitability, sales, number of customers and consistent growth rate of SMEs. Findings of this study would be of help to entrepreneurs, policy makers and the academic community as it will add to the existing literature on how availability of EI impacts the growth of SMEs. The study recommends that government should use fiscal policies to address the economic challenges of SMEs and also invest in the provision of EI facilities to facilitate the growth and development of SMEs in Nigeria.

Effect of Strategic Management Practices on Growth of Small and Medium Enterprises in Kitui South Sub County

Small and medium enterprises (SME) play a very important role in our day to day lives; they drive a countries economy, shape the world’s economy and as a result make life easier, as a matter of fact flourishing organizations show how well a developing nation is doing. The purpose of this study was to uncover the effects of strategic management Practices on growth of Small and medium enterprises in Kitui south sub county. The study assessed the effect of corporate governance, strategic planning, corporate social responsibility and innovation and technology on growth of Small and medium enterprises in Kitui south sub county. The study is grounded on agency theory, resource-based theory, stakeholder theory and innovation diffusion theory. The study adopted a descriptive research design. The target population was owners and employees of Small and medium enterprises operating in Kitui south sub county. The sample frame for the study was drawn from Small and medium enterprises operating within Kitui south which are 418 registered SME’s. From this a sample size of 83SME’s was chosen using simple random sampling technique. To facilitate the process of data collection, questionnaires which contain structured and opened ended questions, were issued to the respondents and informal interviews was also conducted so as to ensure data accuracy. The data collected was then analyzed using descriptive and inferential statistics with Statistical Package for Social science (SPSS) and Microsoft Excel as tools of analysis. The data analysis involved tables, charts, frequency distribution charts, percentages, regression analysis and standard deviations and the data was presented inform of tables and figures. The study findings revealed that, all the four elements of strategic management practices considered in the study that is; Innovation and Technology (IT), Strategic Planning (SP), Corporate Governance (CG), Corporate Social Responsibilities (CSR), explain about 47.6% of the growth of small and medium enterprises in Kitui South Sub County, as represented by the Adjusted R Square coefficient of multiple determinant = 0.476. The study further found that innovation and technology had the greatest influence on growth of SME’s in Kitui county, it iterates that corporate governance has a positive influence on and that there is a strong relationship between corporate social responsibility and growth of SME’s. Based on the results of the study, it is recommended that SME owners should consider having a well written down strategy for their SME to grow and their CSR activities to be enhanced in order to have a positive influence on the growth of the SME and business. This study recommends that further research be carried out targeting the small owner-managed companies as well as other organizations in Kenya to enable generalization of findings.

ANALISIS SEKTOR USAHA KECIL MENENGAH (UKM) TERHADAP PENYERAPAN TENAGA KERJA DI KABUPATEN BONE PROVINSI SULAWESI SELATAN

This study aims to determine the effect of small and medium enterprises (SME) growth on labor absorption, the effect of regional minimum wages level for small and medium enterprises toward employment absorption, as well asthe effect of both SME growth and minimum wages on the employment absorption in Bone Regency South Sulawesi. This research was conducted at the Office of Cooperatives and SMEs as well the Manpower Office of Bone Regency, South Sulawesi. The type of researchis descriptive quantitative. The results indicates that the Adjusted R square value of this model is 0.916, which means that 91.60 percent of variations in the employment absorption could be explained by independent variables in the study, while the remaining 8.40 percent is explained by other factors which arenot included in this study. The value of AdjustedR Squares is above 50 percent and categorized inthe good category. In the other wordthe selection of variables affecting the dependent variable is already very appropriate

Comparative Analysis of SME Policy: The Takeaway for Bangladesh

Small and Medium Enterprises has been in attention of researchers for their potential in accelerating economic growth. Hence, SME policy is vital in ensuring the economic development of any country. Comparing the SME policy in different parts of the world can shed light on issues related to SME development. Bangladesh is trying to emphasize on SME growth and enhancement. Therefore this study aims to compare different SME policies and uncover the areas where Bangladesh needs improvement. Keywords: Small and Medium Enterprises (SME), Policy Analysis DOI : 10.7176/EJBM/11-21-03 Publication date :July 31 st 2019

Peran Entrepreneur Orientation Terhadap Volatilitas UKM Dengan Budaya Lokal Sebagai Pemediasi

This research aim is to find growth strategy of small and medium enterprises (SME) oriented with entrepreneurship by looking at enterpises’ growth and sales based on the ethical discernment of the local culture of SME. This research is conducted in 5 areas i.e. Jakarta, Bogor, Depok, Tangerang and Bekasi. This research is also meant to analyze the impact of strategic growth as prediction tool of the volatility of SME (EO and its scope) and the potential effect of growth strategy on the volatility of SME. Developing literature model of small and medium enterprises’ volatility research with strategic growth based on the ethical discernment of the local cultures. Research method used is quatitative method with random sampling on the entire population of SME in Jabodetabek and tool of analyze used is Struktur Equation Modeling using WarpPLS 5.0 Program. Variance or component based Struktur Equation Modeling used to test hypotheses. The result of this research positively and significantly gives contribution to the role of the ethical discernment of the local cultures of SME and entrepreneurship orientation / strategic growth projected with innovative, risk taking and pro-active, in which give contribution of 56%, 80%, 83% respectively to the entrepreneurship orientation/strategic growth of SME against volatility of SME that is fully moderated by the ethical local culture of SME in Jabodetabek.

Applications of information and communication technology for sustainable growth of SMEs in India food industry

Indian food sector is facing severe problem of wastage of about 30% of farm products due to inefficiency in operations of Small and Medium Enterprises (SMEs). The SMEs in Indian food sector are facing different challenges, such as financial issues, lack of technical skills and investment in the business etc. In this sense, several key factors can help food SMEs in reducing wastage of farm products and lowering energy consumption for sustainable growth. Thus, this paper tries to identify and analyse key factors for Information Communication Technology (ICT) applications for a sustainable growth of SMEs in Indian food sector. Grey based Decision-Making Trial and Evaluation Laboratory technique was applied for analysis of factors. From findings, ‘Government initiatives and policies’, ‘Public-private partnership’, and ‘Encouragement to ICT service provider’ are topmost influential cause group factors. While, ‘ICT integrated effective food supply chain’, ‘Coordination between different departments’, and ‘Collaboration and strategic alliances across supply chain’ are highest influenced factors. Results suggests that ‘Government policies and initiatives’ are at the core of the efforts to upgrade food supply chain. As, Indian government is the largest customer of SMEs and controls various policy-making aspects in food sector. Therefore, government has to take steps to encourage private and foreign investments as well as promote IT service providers and business environment related economic policies to improve competitiveness of Indian food sector. This work would help managers to develop efficient ICT applications for an effective sustainable growth of SMEs in their respective food supply chains.

Financial literacy as a moderator linking financial resource availability and SME growth in Ghana

The argument holds that visionary and dynamic small and medium enterprises (SMEs) tend to position growth at the centre of strategy. However, there has been a growing body of literature that has examined how financial literacy can support owner-managersof SMEs in making solid financial decisions that will enhance the growth of their businesses. In the present study, financial literacy and financial resource availability were modelled as different antecedents of SMEs growth. Nevertheless, the boundary condition for such models has received very little attention in the context of Ghana. Accordingly, in regard to resource-based view (RBV) logic, the current research examined the implications of contingency variable financial literacy (proficiency) on the relationship between financial resource availability and SMEs growth, particularly in the context of Ghana. The findings of the current research revealed that high financial literacy led to more positive effect of financial resource availability on SMEs growth.

Factors affecting the adoption of computerized accounting system (CAS) among smes in Jaffna District

Small and Medium Enterprises (SMEs) have been recognized as an important strategic sector for promoting growth and social development in Sri Lanka. It is necessary to use computerized reporting system instead of manual recording system for recording business transaction to run business smoothly and achieve growth and profitability. However, many of these enterprises have not adopted to the Computerized Accounting System (CAS) despite the benefits of this system. This study was designed to identify the factors affecting to the adoption of CAS among Small and Medium Enterprises in Jaffna district. It will be caused to recognize constraints which affect to the adoption of CAS among SMEs and assist to growth and social development of SMEs in Sri Lanka. Primary data were used as the data source of this study. Data were collected using a questionnaire and analyzed those using descriptive statistics, correlation and regression analysis. Government of Sri Lanka should encourage SMEs for adoption of CASs. Finally, SMEs should understand benefits and value of CAS when they adopt it to their organizations. We can confirm that adoption of CAS will lead to growth of SMEs in Jaffna district.

SME policies as a barrier to growth of SMEs

We investigate whether firms have incentives to retain their status as small and medium enterprises (SMEs) to benefit from various SME policies. To examine this issue, we use the exogenous changes in the SME Basic Act in Japan. The SME Basic Act describes aims of SME policies in Japan, which involve enhancing the growth of SMEs using policy. The Act also contains the requirements and definitions of SMEs that are the target of the policies. Only firms that satisfy the definitions of SMEs under the SME Basic Act can participate in the SME policy programs in Japan. The requirements regarding capital stock in the SME Basic Act were changed in 1999. By focusing on the change in the requirements for capital stock as an exogenous event, we show that firms are less likely to increase their capital stock so that they can continue to satisfy the requirements that retain their status as SMEs. Furthermore, firms that increase their capital stock increase their size. As firms have a disincentive to increase capital stock so that they can keep their SME status, this indicates that the SME requirements are significant constraints on firm growth. Many studies show that individual SME policies (such as R&D subsidies and public credit guarantees) stimulate firm growth and activities that are consistent with the aim of these SME policies. Although the purpose of the SME Basic Act is the enhancement of the growth of SMEs, we show that the requirements under this law impede the growth of SMEs.