Small And Medium-sized Enterprises In Nigeria Research Articles

Small and Medium Scale Enterprises: An Appraisal of the Role of Taxation and Intellectual Property on Their Growth in Nigeria

This research critically analyzes the concept of small and medium-sized enterprises (SMEs) and looks at the tax and intellectual property implications and considerations. The aim is to expose how Intellectual Property law can help sustain Small and Medium Sized Enterprises (SMEs) in the marketplace and improve the growth and development of the Nigerian economy through taxation. To achieve these, the research examined the essential roles of Intellectual Property in the growth and development of Small and Medium Sized Enterprises. The rights and remedies to which the owners of Small and Medium Sized Enterprises (SMEs) are entitled, as well as the challenges of Intellectual Property Laws and their corresponding tax liabilities under the relevant pieces of legislation in Nigeria, are considered. This research evaluates the factors contributing to the non-compliance of SMEs with tax obligations. These include complex filing procedures, multiple taxations of SMEs, and a lack of proper enlightenment. The finding reveals that SMEs have performed below expectations due to specific reasons ranging from societal constraints to issues of lack of awareness, instability, and change in the economy. Tax compliance among SMEs in Nigeria is poor. To enhance the growth of Nigerian SMEs, there is a need to explore enlightenment and awareness through the use of intellectual property and taxation.

The implication of CSR on the performance of SMEs in the context of a developing economy

While corporate social responsibility (CSR) has been extensively explored from the standpoint of large corporations and developed economies, smaller businesses and developing economies have received little attention. Small and medium-sized enterprises (SMEs) continue to be the backbone of most economies, significantly accounting for a major share in economic value creation. This implies that the contribution of SMEs in achieving sustainable development is therefore critical. The study seeks to add to the limited literature by investigating the implication of socially responsible behavior on the performance of SMEs in Nigeria. Corporate reputation, profit maximization and management efficiency are dependent variables used as proxies for performance measurement. A well-structured questionnaire was administered to 63 Nigerian SMEs. The study adopted a structural equation model using SmartPLS for the data analysis. Findings show a significant relationship between corporate social responsibility and the three determinants of firm performance (management efficiency, profit maximization and corporate reputation). This study has implications for owners/managers of SMEs who are keen on improving performance by leveraging on socially responsible behaviour through the development, implementation and communication of a sustainable and acceptable CSR initiative. Recommendations and suggestions for further investigations are made.

Strategic entrepreneurship practices and performance of small and medium-sized enterprises in Nigeria

The paper examines strategic entrepreneurship practices and performance of small and medium-sized enterprises (SMEs) in Nigeria’s hospitality industry. The necessity of this study is due to strategic entrepreneurship practices and the performance of SMEs in Nigeria’s hospitality industry is being critical for providing a solution as to how entrepreneurs can exploit and explore the business environment and remain competitive. The purpose of the paper was to examine the relationship between strategic resource management and the quality of SMEs services/products, as well as ascertain the relationship between entrepreneurial innovation and increased sales volume of SMEs in Nigeria’s hospitality industry. A survey design was used as a questionnaire instrument and had been constructed and issued among 400 sampled respondents drawn from 1,294 employees from selected SMEs of the Nigerian hospitality industry, 365 respondents were filled and retrieved. This represents 91.25% of the total sample administered. The multiple linear regression techniques were used to test the research hypotheses. The results showed that strategic resource management and entrepreneurship innovation have a significant influence on the performance of SMEs in Nigeria. The result also showed that strategic resource management enhanced performance of SMEs in Nigeria and entrepreneurship innovation supports creativity of organizational performance. Therefore, managers should progressively incorporate new decision-making styles, processes, and behavior that will place a firm in a competitive and advantageous position during penetration into a new market. AcknowledgmentsWe express our gratitude to anonymous reviewers, the Journal editor, and all the authors whose works were used in one way or the other in this paper. We thank Mrs. Comfort Innocent Okoi for her untiring effort in type-setting and editing work. Our gratitude goes to the management of selected supermarkets, eateries/fastfood, hotels, and stores in Nigeria for approving prompt responses to our questionnaire instruments on strategic entrepreneurship practices and the performance of small and medium enterprises in Nigeria.

Determinants of small and medium scale enterprises, poverty and economic growth: A case study of Nigeria

Small and Medium-sized Enterprises (SMEs) have been the subject of increasing attention by policymakers in national governments and international institutions in both developed and developing countries. This article focuses on the determinant of small and medium scale enterprises, poverty and economic growth in Nigeria. Secondary data were tested for unit root. Correlation analysis, Autoregressive Distributed Lag model were adopted to test for the objectives of this study. Results of analyses indicated that the major significant determinants of the growth rate of SMEs in Nigeria were bank loan to SMEs at two previous years, government expenditure to SMEs at previous year and three years after for interest rate. The findings also indicated that bank loan to SME, government expenditure and interest rate were also the determinants of real gross domestic product growth (RGDPG) with respect to the years under study. Results of ARDL also showed that SMEs contribution to gross domestic growth, bank loan to SMEs and government expenditure were all significant and exerted dominant impact on poverty level. Furthermore, results revealed a unidirectional causality between economic growth and poverty, between SME growth and poverty, and between SME growth and economic growth. The study therefore recommends the setting up of enterprise development agencies in every state of the federation to serve as coordinating unit that will help business enterprises as well as reduce unemployment, poverty and its attendant effect on economic growth.

Social media adoption and business performance: the mediating role of organizational learning capability (OLC)

Purpose The purpose of this paper is to explore the mediating effect of learning capacity in the relationship between the social media usage by the construction of small- and medium-sized enterprises (SMEs) and their business performance in Nigeria. Design/methodology/approach A quantitative survey technique was used to collect data from the owner/manager of construction SMEs in Nigeria. The partial least square structural equation modeling was used in the assessment of the measurement model and structural model to assess the validity and reliability of the measures and to evaluate the hypotheses proposed in the conceptual model. Findings Empirical findings indicated a significant positive relationship between learning capacity and performance of SMEs. Similarly, the use of social media is significantly and positively associated to the business performance of SMEs. It has also been shown that learning capacity is a mediator of the relationship between social media and SME performance. Research limitations/implications The data for the study is are all from a single industry and a related line of business, so it could be more interesting to include more companies across sectors or industries. The finding contributes to the ongoing debate on the effect of social media on business performance. It also defined the need for the owner/manager of SMEs to understand and appreciate the effect of social media through the organization's learning potential to gain a sustainable competitive advantage. Practical implications There are a number of theoretical and practical implications for academics and practitioners who are interested in further studies of organizational social media. The research presents a quantitative study on the effect of social media adoption on the organizational performance of the construction industry. This study confirms the mediating role of learning capability in the relationship between the use of social media and performance of SMEs operating in the construction industry. Originality/value This study empirically examined the relationship between social media adoption and the SMEs learning capability and business performance by evaluating a hypothesized conceptual framework to establish the relationships.

Trusting in indigenous institutions: exporting SMEs in Nigeria

PurposeThe purpose of this article is to develop new insights into the interplay between trust, indigenous institutions and weak/dysfunctional formal institutions using the Nigerian context – a developing country in Western Africa. It advances new understanding on how Nigerian entrepreneurs trust in their indigenous institutions such as family ties, kinship, chieftaincy, religion, cooperatives and trade associations to resolve disputes arising from their exporting activities as opposed to dormant formal institutions in their country.Design/methodology/approachThis exploratory study adopts an interpretive research paradigm, and it utilises a case study strategy. Data collected through observations, archival records and qualitative conversations with 36 exporting Nigerian small and medium-sized enterprises (SMEs) is analysed by utilising a combination of within and cross-case analysis techniques. Doing so enabled an in-depth study of the methods their owner-managers use in order to take advantage of the relationships they established through their long-standing cultural institutions in the place of weak formal institutions in their country.FindingsIndigenous institutions have evolved to replace formalised institutions within the business environment in Nigeria. They have developed to become an alternative and trusted arbiter for solving SMEs' export issues because of weak/dysfunctional formal institutions in the Western African country. The owner-managers of exporting SMEs perceive formal institutions as representing a fragmented system that does not benefit their export businesses.Practical implicationsThe findings demonstrate that there is need for policymakers to consider the role of informal institutions in the Nigerian context. Such an approach is essential given the economic importance and increasing number of SMEs that trade and export their goods through informal structures in Nigeria.Originality/valueThe study indicates that it is not just the void or absence of institutions that exist in a developing country such as Nigeria, but weak/dysfunctional formal institutions have been replaced by culturally embedded informal institutions. Thus, the study provides a new theoretical avenue depicting the concept of trusting in indigenous institutions.

The Impact Of Marketing Innovation On The Performance Of Small And Medium Enterprises In Nigeria

The intensity of global market competition has created dynamic and fast-changing business environment which has affected all enterprises including small- and medium-sized enterprises (SMEs). SMEs have, therefore, realized the need to explore, exploit and deploy marketing innovation and innovative strategies in order to stay competitive in the changing business environment. In both developed and developing countries across the world, SMEs form an important fragment of the local economic system. Therefore, the objective of this study was to assess the impact of marketing innovation on the performance of SMEs in Nigeria. The study was guided by an epistemological research philosophy adopting a positivist research paradigm. The research design was cross-sectional survey design using both quantitative and qualitative approaches. The target population for this study was 782 registered SMEs by and the sample size was 120 respondents derived using Fisher’s formulae. This study used a self-administered, closed, and open-ended questionnaire to obtain quantitative data. The used descriptive statistics such as mean, standard deviation, median and proportions using the Statistical Package for Social Sciences (SPSS) version 24 and Microsoft Excel. Regression analysis and correlation analysis were used to determine the direction and strength of the relationship between the independent and the dependent variables. The study results revealed that whereas marketing innovation had a positive and significant influence on performance of SMEs in Nigeria. Study concluded that in this ever-changing technology, adoption of various innovations by SMEs is a key component of enhancing their performance. Therefore, enterprise owners need to be proactive in adopting different innovations since they all are linked positively to the performance of enterprises.

Influence of Entrepreneurial Traits on the Performance of Small and Medium Sized Enterprises (SMEs) in Lagos State, Nigeria

Factors such as political instability, government policies, infrastructural inadequacy and entrepreneurs’ non-possession of relevant personal characteristics are connected on the high failure rate of small businesses in Nigeria. On the back of these identified problems the study focused on Influence of entrepreneurial traits on the performance of Small and Medium Sized Enterprises in Lagos State., Specifically, resilience, innovativeness, drive for achievement, and risk taking propensity were the entrepreneurship traits examined in relation to the performance of SMEs in Lagos state. Primary source of data through a questionnaire was used to achieve the stated objectives. Random sampling method was used to collate data of 125 entrepreneurs who participated in the study. Frequency tables and percentages were used for data presentation and the Regression analysis was used to test the formulated hypotheses, with the aid of statistical package for social sciences (version 21.0). The study summarised that there are significant relationships between the tested traits and the growth of SMEs in Nigeria. The study recommended that owner/ entrepreneurs should individually improve their skills in these critical traits’ areas. In addition, the government should provide institutional support in terms of training and development. Government should also create an enabling environment for business to thrive, through provision of infrastructures.

Mobile marketing technology adoption in service SMEs: a multi-perspective framework

PurposeThe popularity and use of mobile marketing technologies or devices have led to significant interest from researchers and practitioners, particularly in small- and medium-sized enterprises (SMEs), where these technologies offer significant benefits to SMEs given the poor human capital and financial constraints encountered. The use of mobile marketing devices assists SMEs to boost their sales promotion strategies which aim at increasing the sales of their products and services. However, there has been limited focus on developing a suitable framework that enables the evaluation and shared an understanding of the factors influencing the adoption of mobile marketing technology by service SMEs in Nigeria. Therefore, this paper aims to develop a theoretically grounded framework for exploring these factors and explaining their impact on mobile marketing technology adoption in SMEs in Nigeria.Design/methodology/approachThe study is qualitative and used both unstructured and semi-structured interviews with a total of 26 participants drawn purposively from NIJA database in Nigeria. Thematic analysis was deployed in analysing the data.FindingsThe study developed an extended technology organisation environment (TOE) framework by incorporating the value anticipation context which helped to unveil 16 key factors influencing mobile marketing technology adoption in service SMEs in Nigeria. The finding revealed that factors associated with the extended TOE framework have an impact on SMEs mobile le marketing technology adoption but at different levels.Research limitations/implicationsThe limitation of this study emerged because of the use of qualitative methodologies about the research design, rigour in the collection and management of the large volume of the raw data, the data analysis and the credibility of the findings. This may lead to unforeseen respondent and research bias in the data analysis, which may lead to a limited understanding of alternatives and insights into the factors influencing the adoption of mobile marketing. Hence, other measures and approaches such as case study and mix-method could be deployed to validate the findings further. Also, one of the limitations of qualitative study has been the issue of theoretical generalizability of the framework. The generalizability of the formwork needs to be established across a broader range of the population. Future studies may apply confirmatory statistical techniques to test and ascertain the validity and reliability of the framework across a broader population of mobile marketing technology adopters in Nigeria. Such studies may be used as a benchmark for the theoretical constructs and the factors that may lead to the success or failure of mobile marketing technology adoption.Originality/valueThe study had further enriched TOE framework and provided an analytical dimension for exploring the adoption of mobile marketing technology. It also demonstrates the capacity to provide a reliable explanation of the factors and serves as a tool for evaluating the benefits or challenges of mobile marketing technology adoption in SMEs in Nigeria.

Cloud Computing Adoption in Small and Medium- Sized Enterprises (SMEs) of Asia and Africa

Cloud computing is a rapidly emerging technology over the last few years that has abolished the burden of purchasing heavy hardware and licensed software. Cloud computing has been advantageous to Small and Medium-sized Enterprises (SMEs), but still numerous SMEs have not adopted cloud computing to delve into its appealing benefits. Asia and Africa vary notably regarding their innovative capability. Asia has been competent to advance and sustain world leadership in technological innovations whereas Africa has not developed significantly in these terms. A seldom comparative study has been implemented on the reasons for the innovation gap between these two continents. This article examines and compares the cloud computing adoption from a Geo-regional framework; Asia and Africa. A comparative study is used to organize the findings from China in Asia, and Nigeria in Africa. The article identifies the probable benefits, usage of cloud computing and level of cloud computing adoption amid SMEs in Nigeria and China. The paper explores the margin that subsists amongst the level of cloud computing adoption in SMEs of these two countries and specifies challenges particular to each country intercepting the complete cloud computing adoption and proposes solutions for Nigerian SMEs to beat these challenges. Furthermore, the article contributes proof-supported intrusion for cloud service providers, the government and the capitalism to enhance the cloud computing adoption amid SMEs to eventually determine the enterprises for the probable financial advantage.

Does Access to Finance Enhance SME Innovation and Productivity in Nigeria? Evidence from the World Bank Enterprise Survey

ABSTRACTThe primary link between financial institutions and economic performance is the provision of resources by these institutions to businesses in order to drive enterprise development. In this study, the role of access to finance in enhancing innovation and productivity among Nigerian small and medium‐sized enterprises (SMEs) is investigated using the World Bank Enterprise Survey (ES) dataset. Access to finance is categorized as external and internal to the firm. Using the logit estimation technique, the study finds that ease of accessing bank credit is the strongest positive force in driving all types of innovation among SMEs in Nigeria. In the same vein, the source of investment financing matters in terms of how it affects innovation: both internal and external sources improve investment in product, process, and organizational innovation, but only external financing has a significant effect on R&D spending and use of foreign licensed technology. Overall spending on R&D is only driven by access to external finance by the SMEs. The study also shows that increased access to finance may actually lead to productivity decline among SMEs in Nigeria.

Critical success factors in introducing performance measurement metrics for small and medium-sized enterprises (SMEs)

The rapid pace of technological advancement and the effect of globalisation have led to far-reaching modifications in the way business is conducted worldwide. Public and private enterprises alike have recognised effective performance measurement systems as a way to gain competitive advantage. This paper addresses the challenges faced by small and medium-sized enterprises (SMEs) in selecting an appropriate performance measurement system to gauge actual performance against their goals and objectives. The literature review was conducted by content analysis and the validity of the findings was tested by a survey on 50 SMEs in Nigeria. The results were analysed using the statistical package for social sciences. The paper had initially proposed six critical success factors that ought to be considered in the introduction of performance measurement systems in SMEs - these were derived from the extant literature. However, results of the empirical evidence suggest that the extant literature on performance measurement from developed economies do not align with findings from developing economies. Based on the findings, a new set of four critical success factors for a performance measurement system in SMEs of developing economies was proposed. These are believed to be better suited to the context of the SMEs and considered essential for them to benchmark their performance successfully against set goals and objectives.

The Determinants of Small and Medium-sized Enterprises Performance in Nigeria

This study aimed at examining the determinants of small and medium-sized enterprises (SMEs) performance in Nigeria. An autoregressive distributed lag approach to cointegration was applied to sample from 1981 to 2010 to achieve the set objective. The results revealed that both in the short-and long-run, interest rate and net export have had a negative impact on SMEs performance. At the same time, other determinants such as government spending, political instability and level of education were found to have insignificant impact during the studied period. Therefore, maintenance of low interest rate will undoubtedly assist to boost the performance of SMEs in Nigeria. As such, monetary authorities need to play a very important role toward achieving the target.

Financing Market Innovation by Knowledge - Intensive Businesses for Socio Economic Advancement in Emerging Economies

This paper aims to investigate the strategies for financing new market innovation by KnowledgeIntensive Business Services (KIBS) firms for socio-economic advancement in Nigeria. A framework is built in which small firms finance new market innovations through utilizing finance from two distinct institutional sources, which are formal (e.g. banks) and informal (e.g. cooperatives etc.) institutions. Primary data through a survey of 510 small and medium sized enterprises (SMEs) inknowledge-intensive businesssector of Lagos, Nigeria at firm level is employed. The findings suggest that the informal sources accommodate the needs of small firms in a developing economy and serve as the primary source of finance for new market innovation. Thus, the informal system should be acknowledged as an integral part of the institutional system influencing innovation in emerging economies. The scope of the study is restricted to only KIBS SMEs in one local context, Lagos, Nigeria. The findings could assist in formulating policy frameworks for supporting innovation, based on utilization of external financial resources by KIBS SMEs in Nigeria. This paper contributes to the literature on financing market innovation and the institutional theory of entrepreneurship in emerging countries, by providing a better understanding of the strategies of the formal and informal institutional sources of finance that are connected with new market innovation by KIBS SMEs in emerging economies.

Barriers to SMEs participation in public procurement in Nigeria: some preliminary results

The aim of this study is to develop an instrument with which to measure the perception of barriers facing small and medium-sized enterprises (SMEs) in public procurement, based on a sample of 120 SMEs in Nigeria. Using exploratory factor analysis (EFA), four factors were extracted, namely; information obscurity, incapability, ignorance of procedures and arduous and stringent process. Reliability and item analysis offers support for the internal consistency and the discriminatory power of items that represent the factors. Above all, it was found that information obscurity and incapability have the highest mean scores, signifying that these factors are perceived to be the foremost barriers facing SMEs in public procurement. A key result of this study is that it generates explanatory theories on SME barriers to public procurement and offers factorial hypotheses in a form suitable for subsequent testing.

An exploratory study of international strategic choices for exporting firms in Nigeria

AbstractInternational markets offer potential opportunities for small and medium‐sized enterprises (SMEs) in developing markets in terms of export growth and performance. Notwithstanding these benefits, many SMEs in Nigeria have not initiated exports or have faced problems in competing in the export markets. The aim of this article is to examine strategic choices available for SME exporting firms in Nigeria. Results of data analysis revealed that the three types of strategy orientations pursued by firms for dealing with competition in export markets are low cost, differentiation, and differentiation focus strategies. Findings also showed that low cost and differentiation strategies are significantly and positively related to export performance. © 2012 Wiley Periodicals, Inc.

Drivers for Information and Communication Technology Adoption: A Case Study of Nigerian Small and Medium Sized Enterprises

In recent times, the current use of Information and Communication Technology (ICT) in many organizationscauses some forms of revolution in their business practices. ICT is increasingly becoming related toorganizational values (Rastrict and Corner, 2010). Researchers (e.g. Rastrict and Corner, 2010; Lin and Lin,2006 and Melville et al., 2004) reveal that there is a growing support for the positive relationship between ICTand its advantages. According to Kapurubandara and Lawson (2006), ICT offers promising opportunities toorganizations in order to meet the challenges of an ever-changing environment. ICTs have a remarkable potentialto contribute to sustained competitive advantage for businesses, having been identified as key tools inmanagement processes (Ion and Andreea, 2008). Kutlu and Özturan (2009), argue that in Small and MediumSized Enterprises (SMEs), ICT can be used as a business tool to reduce costs, create stronger links withcustomers, create innovations and facilitate market niche. Ongori (2009) also states that SMEs are compelled toadopt ICT in their business processes in order to cope with the challenges in the business environment. Thus, thispaper intends to identify some drivers for ICT adoption amongst 25 SMEs in Nigeria. The paper is drawn fromon-going PhD research.