Organizational Capacity and Performance of Ethiopian Small and Medium-sized Enterprises
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Small and medium-sized enterprises (SMEs) outnumber large companies worldwide by a wide margin, employ many more people and drive innovation and competition in many economic sectors. The move toward promoting more SMEs is often associated with their ability to lead socio-economic development through economic innovation and social impacts, thus creating more jobs for the vulnerable. In Ethiopia, the recent growth in SMEs has proven to be an innovative way to challenge high urban unemployment by advocating more entrepreneurship. However, many studies concentrate on the SMEs’ role of job creation rather than their organizational capacity and performance which leads to their sustainability and survival. In this paper, we empirically analyze the impact of organization capacity and management system of SMEs on their economic performance, using mean comparison followed by a regression analysis. Specifically, we identify which element of organizational capacity has the most significant impact on SME economic performance. Therefore, the paper presents a theoretical argument that supports the importance of SMEs in a local economy, their organizational capacity and their performance and shows the statistical results of the mean comparison and linear regression analysis. Finally, a discussion of the results and conclusion are presented with final remarks.
Abstract
Small and medium-sized enterprises (SMEs) outnumber large companies worldwide by a wide margin, employ many more people and drive innovation and competition in many economic sectors. The move toward promoting more SMEs is often associated with their ability to lead socio-economic development through economic innovation and social impacts, thus creating more jobs for the vulnerable. In Ethiopia, the recent growth in SMEs has proven to be an innovative way to challenge high urban unemployment by advocating more entrepreneurship. However, many studies concentrate on the SMEs’ role of job creation rather than their organizational capacity and performance which leads to their sustainability and survival. In this paper, we empirically analyze the impact of organization capacity and management system of SMEs on their economic performance, using mean comparison followed by a regression analysis. Specifically, we identify which element of organizational capacity has the most significant impact on SME economic performance. Therefore, the paper presents a theoretical argument that supports the importance of SMEs in a local economy, their organizational capacity and their performance and shows the statistical results of the mean comparison and linear regression analysis. Finally, a discussion of the results and conclusion are presented with final remarks.
참고문헌 (15)
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