Determinants of Growth Potential and Constraints of Micro and Small Enterprises in Lideta Sub City of Addis Ababa City Administration, Ethiopia
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Date
2021-02
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Addis Ababa University
Abstract
The general objective of this study was to assess the growth potential and identify the constraints of MSEs operating in Lideta Sub City of Addis Ababa City Administration. The study was adopted descriptive and explanatory research design with qualitative and quantitative approaches of cross sectional data collected from primary and secondary sources through a structured questionnaire, observations and interviews. The sample size was determined by using slovin’s formula and contained 162 samples of MSEs that are grouped into sectors of manufacturing, construction, service, trade and urban agriculture. These samples were selected from each sector using proportional stratified random sampling method. The data were analyzed with linear regression analysis of Ordinary Least Square technique and summary statistics. The findings revealed that current capital, gender and education are found to be significant factors that affect MSE growth positively and statistically significant. The findings also showed that initial capital and experience are statistically significant and negatively associated with the growth of enterprises by employment. However, source of finance, family size and age are found to be statistically insignificant variables in this study.
Policy makers and other stakeholders should reconsider financing strategy for MSEs and firms of MSEs with lower capital should take actions towards better improvement of their growth potential. The government actors and other stakeholders should give due attention to gender difference appearing in the participation of MSE operation. The potential limitations of this study were time and financial constraints. Finally, future panel surveys and availability of other data may call for further studies in order to have inclusive solution for the constraints of MSE growth.
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Constraints, Enterprise Growth, Micro and Small Enterprises