Business Environment and the Financial Performance of Small and Medium Enterprises

Business Environment and the Financial Performance of Small and Medium Enterprises

Author by Dr. Andy Okwu

Journal/Publisher: Corporate Ownership & Control

Volume/Edition: 12

Language: English

Pages: 493 - 505

Abstract

Abstract

The financial outcome of an enterprise is perceived to have some relationships with its operational environment. This stud y analysed the business environment as a correlate of financial performance of small and medium enterprises (SMEs), as to contribute to environment-enterprise policy mechanisms and regulatory framework, industry and management practices. Relevant definitional criteria and World Bank's model were adopted to sample 228 SMEs from 456 via judgmental and convenience techniques. Multifactor business-environment questionnaire (MBEQ) was used to elicit responses from   SMEs in a field   survey.  Enterprise   type, activity, product line and financial performance were examined. Results showed dominance of sole proprietorship and services SMEs, multi-product lines, and  highly   positivel y  correlated  financial performance and   business environment. Consequently, improved SME-friendly business environment was recommended.


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