Factors Affecting the Performance of Small and Medium Manufacturing Enterprises: in the Case of Kirkos Sub-City Administration
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Date
2026-06-02
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Addis Ababa University
Abstract
Small and medium manufacturing enterprises (SMMEs) play vital role in economic development, employment creation and poverty reduction in Ethiopia. However, their performance is constrained by several internal and external challenges. This study examined the internal and external factors affecting the performance of small and medium manufacturing enterprises (SMMEs) in Kirkos Sub-city, Addis Ababa, Ethiopia. It assessed the influence of managerial skills, technology adoption, working premises, marketing strategies, access to finance, market access, the regulatory environment and economic stability on the productivity, competitiveness, and sustainability of manufacturing SMMEs. The study employed a mixed exploratory–descriptive research design. Data were collected from 199 owners and managers of manufacturing SMMEs using structured questionnaires. Descriptive statistics, correlation analysis and multiple regression analysis were used using SPSS software. The findings of the study showed that internal factors managerial skills and technology adoption influenced enterprises' performance positively. However, the external factors such as access to finance, infrastructure and regulatory constraints affected business growth and sustainability negatively. Managerial skills and technology adoption were identified as major challenges limiting enterprise competitiveness. The study concluded that SMME manufacturing performance is dependent on internal and external factors. If there are no supportive institutional and economic environments, then improving managerial competencies and technology adoption are insufficient. Therefore, the study recommends strengthening of entrepreneurship and managerial training programs, improving access to affordable finance, simplification of regulatory procedures and expansion of infrastructure and market support services to enhance the long-term performance and sustainability of manufacturing SMMEs.
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Small and Medium Manufacturing Enterprises, Performance Determinants, Managerial Skills, Technology Adoption, Market Access, Kirkos Sub-city, Addis Ababa.