H’Wold, Endeshaw Mulatu (2005) Determinants of Enterprise Growth: The Case of Small Manufacturing Enterprises in Bahir Dar Town. Masters thesis, Addis Ababa University.
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Abstract
The dynamic role of small enterprises in developing countries as engines through which the growth objectives of these countries can be achieved has long been recognized. In the face of a rapidly growing labour force where public sector hiring slowed and the growth of the large modern private sector has relatively stagnated, the role of the small as well as micro enterprises in employment creation is indispensable. Despite the fact that Small Enterprises have been recognized as a major contemporary source of employment and income in a growing number of developing countries, yet relatively little is known about the characteristics and patterns of change in these enterprises. Most past research in this area, however, have been static in their orientation, providing a picture of how things look "today" or as of the time of the study. This argument holds true to our case that studies on dynamic aspects of small enterprises are almost non-existent. The aim of the study is to examine and identify factors affecting growth of employment in small enterprises. This study used cross-sectional data collected through a field survey in Bahir Dar town of the Amhara Region. The method employed is a multiple linear regression analysis that makes an econometric estimation on 76 small manufacturing enterprises to determine the explanatory factors of their employment growth. The explanatory variables considered in the study represent firm and owner-manager characteristics and business practices. The results at most do not reveal any surprises compared to other similar previous empirical researches conducted elsewhere. Factors found to influence significantly small manufacturing enterprise growth in Bahir Dar are market size, young age of the entrepreneur, age of the enterprise and reliance on external sources of finance i.e. Bank loan. However, sex of the owner, size of the firm, post-high school level of education and experience of the entrepreneur have no significant effects on the growth performances of small enterprises as far as the study area is concerned. The findings give rise to several policy implications that are crucial for the improvement of the sector's performance. These include policy makers have a role in dispelling the myth, particularly among finance or credit providers (mainly banks), that small enterprises in general and women owners in particular are high-risk borrowers of capital. The findings call for public policies such as the youth employment strategy, which among others encourages the young entrepreneurship. Blanket policy approaches to small enterprise growth may not be effective. Policies targeted at small enterprises that are willing to take risk and able to grow are preferable. The findings also call for introduction of guarantee schemes to support small-sized enterprises that can not meet bank and financial collateral requirements.
| Item Type: | Thesis (Masters) |
|---|---|
| Subjects: | H Social Sciences > HF Commerce |
| Divisions: | Africana |
| Depositing User: | Tim Khabala |
| Date Deposited: | 28 Aug 2018 12:29 |
| Last Modified: | 28 Aug 2018 12:29 |
| URI: | http://thesisbank.jhia.ac.ke/id/eprint/8454 |
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