The antecedents of success among small- and medium-sized enterprises: evidence from Ghana

Abstract

Globally, small-and medium-sized enterprises (SMEs) are regarded as highly crucial to economic growth given their strategic role in job creation and the payment of tax to respective governments. In Ghana for instance, SMEs account for about two thirds of GDP and 92% of businesses. This study investigates the antecedents of success among SMEs in Ghana. It specifically analysed the impact of internal factors, entrepreneurial orientation, managerial competence and technological capabilities, and external factors such as access to external capital/finance, human resource capabilities and government policies/practices on the growth and success of SMEs. In assessing the determinants of success among Ghanaian SMEs, the study also provided suggestions on how they could be adequately empowered to contribute to economic growth. A mixed method approach was adopted for the study. For the qualitative data collection method, a semi-structured interview guide was used to solicit information from ten (10) SME managers/owners. Twelve main themes emerged from the interviews conducted. A cross-sectional survey which utilized a random sampling approach with a structured questionnaire was used for the collection of quantitative data from 350 SMEs. Data was analysed using descriptive and multivariate analysis. The correlation and regression results revealed that managerial competence, access to external capital/finance and government policies/practices were significantly associated with success (measured using effectiveness, efficiency of business systems) of SMEs while technological capabilities, human resource capabilities and entrepreneurial orientation were not significantly related to the success of SMEs. The study therefore recommends that SMEs in Ghana need to exploit non-traditional avenues to raise funds to reduce their over-reliance on traditional financial institutions. Further, measures to reduce institutional bottlenecks (such as understaffed regulatory bodies) and provide adequate market information to SMEs are crucial.

Digital Capability and Performance of Micro, Small, and Medium-Scale Enterprises: A Review

“…To take advantage of digital capabilities and unique resources, MSMEs should develop strategies to integrate social commerce into their operations to improve their performance and potentially increase their market share (Yacob et al, 2021). Moreover, based on the reviewed literature, policymakers must increase access to digital capabilities and performance among MSMEs to enhance their success (Hagin & Caesar, 2021). This research findings also indicated that financial resources significantly affected SME growth.…”

“…The authors suggest that by taking advantage of the digital capabilities and resource uniqueness of MSMEs, the performance of these businesses can be improved. Hagin and Caesar (2021) examined the impact of technological capabilities on small and mediumsized enterprises' performance in Ghana. The study found that MSMEs with higher levels of digital capability and performance had better financial performance and greater growth opportunities.…”

“…These competencies include the ability of the organization to invest in developing digital technologies, personnel development, and business strategies aligned to the adoption of innovative technologies. Hagin and Caesar (2021) and Kimani (2017) indicated that finance resources were key in improving MSMEs' performance. However, according to Yacob et al ( 2021), resource capabilities did not affect MSMEs' performance in Indonesia.…”

On the interplay between the entrepreneurs' challenges and the business performance: empirical study and evidence from emerging economies

“…Other studies proved that educated entrepreneurs are able to spot opportunities in the market more than others who are uneducated (Fenton and Barry, 2011; Lipset, 2018 as cited by Islam et al, 2019). Also, Hagin and Caesar (2021) ensured that the managerial competence and know-how is vital for business success and its absence will probably lead to business failure even if financial resources available Sallah and Caesar (2020 reported that experience when accompanied with knowledge affect business growth positively. In fact, the absence of knowledge and education create personal challenges.…”

“…Women entrepreneurs face lengthy procedures in obtaining loans (Belwal et al, 2014) and have to handle on high-interest rates (Islam et al, 2019). Hagin and Caesar (2021) proved that access to finance is one of the success factors of entrepreneurs' business and that it affects the business performance. Based on what mentioned the researchers hypothesize that H1.…”