Effects of Business Environment on Productivity, Innovation and Growth of Small and Medium Enterprises: A Survey of Lagos State, Nigeria

Effects of Business Environment on Productivity, Innovation and Growth of Small and Medium Enterprises: A Survey of Lagos State, Nigeria

Author by Dr. Andy Okwu

Journal/Publisher: Ppcss International Journal Series

Volume/Edition: 2

Language: English

Pages: 203 - 229

Abstract

Business environment is perceived to influence various performance aspects of a business

enterprise. This study employed empirical methodology via a survey design to investigate the

effects of business environment on the productivity, innovation and growth of small and medium

enterprises (SMEs) in Lagos State. The study considered 10 factors of the business environment

and 3 indices of SMEs’ potentials. Definitional criteria the study adopted restricted the

population to 456 SMEs. World Bank scientific model for sample size determination was used to

select 228 SMEs through judgmental and convenience sampling techniques. Quantitative data

were processed from respondents’ qualitative responses. The responses were elicited with a

validated structured questionnaire. Analysis was anchored on generalised linear regression

model (GLRM) that expressed causal relationship between business environment and potentials

of SMEs in the State. The results showed that external finance and technology exerted significant

effects on productivity, innovation and growth of the SMEs; infrastructure had significant effects

on innovation and growth; competition and labour availability and costs significantly affected productivity, and social cultural factors significantly determined growth of the enterprises. The

results also revealed that overall effect of the factors of the business environment was significant

on the metrics of the SMEs’ potentials. The study recommended appropriate technology adoption

by the SMEs and constantly upgrade of same; provision of adequate infrastructure and

facilitating ease of access to external finance to the SMEs by relevant authorities


Other Co-Authors