Determinants of Growth of Small and Medium Enterprises: Empirical Evidence from Gammo, Goffa and South Omo Zones

Awel Beker Washi, Sintayehu Tsega Ayele

Abstract: SMEs had shown little growth and failure in many places. To examine why SMEs failed to grown as expected however, needs a detail empirical investigations. Based on this reality the present study aimed at establishing the determinants of the growth of SMEs using 258 SMEs. The study adopted explanatory research design with quantitative method of data gathering using survey strategy. The finding shows that organizational determinants namely, strategy, management capability, human resource capability and marketing capability were significantly determine the growth of SMEs. The study revealed that access to finance, legal and regulatory factors, technological capability, infrastructural facility and working premises were environmental determinants that positively affect the growth of SMEs. Furthermore the study proved that, personal factors are significantly and positively influence the growth of SMEs. More over from the three dimensions of growth determinants, organizational determinants adversely affect the growth of SMEs. The study concludes that the growth of SMEs is multitude and complicated and determined by personal, organizational and environmental determinants. Policy makers advised to give due attention for these factors while they design and implement policy and strategic plan concerned with SMEs whereas future researchers recommended to consider additional factors that influence the growth of SMEs and conduct longitudinal studies in the future if possible.

Keywords: Growth, Small and medium enterprises, organizational determinants, environmental determinants, factors