Investigating the Impact of Entrepreneurial Infrastructure Deficit on Firm Growth
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Sep 30, 2019
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Abstract
Small and medium enterprises (SMEs) in Nigeria are suffering from a deplorable condition of entrepreneurial infrastructure (EI) which is evidenced in the myriad of challenges bedevilling their growth and development. This study therefore aims to investigate the impact of EI deficit on firm growth, focusing on the growth of SMEs in Nigeria. This was done through a critical review of extant literature (peer reviewed journal articles) on EI which were obtained from reputable data bases and broken down into two basic components of infrastructure (physical and non-physical infrastructure). Empirical findings revealed that the availability of physical infrastructure (constant water supply and good road infrastructure) and the non-physical infrastructure (electricity, government policies/programmes, access to financial support services, incubation centers/platforms, business clusters and entrepreneurship training) improves productivity, profitability, sales, number of customers and consistent growth rate of SMEs. Findings of this study would be of help to entrepreneurs, policy makers and the academic community as it will add to the existing literature on how availability of EI impacts the growth of SMEs. The study recommends that government should use fiscal policies to address the economic challenges of SMEs and also invest in the provision of EI facilities to facilitate the growth and development of SMEs in Nigeria.
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References
References:
Abdul, M., Gunasagaran, K., Kamarudin, N. A., & Mizanur, M. (2017). Critical success factors and challenges of women entrepreneurs in Klang Valley, Malaysia. Journal of Advanced Research in Business and Management Studies, 6(1), 12-23.
Abdullahi, M. S., Ghazali, P. L., Awang, Z., Mohd T. I., Ali, M., & Salim, N. A. (2015). The effect of finance, infrastructure and training on the performance of small and medium scale enterprises (SMEs) in Nigeria. International Journal of Business and Technopreneurship, 5(3), 421-452.
Aftan, Y., & Hanapi, M. (2018). The impact of entrepreneurial motivation on small business performance in Iraq. International Journal of Academic Research in Business and Social Sciences, 8(1), 409-419.
Ahmad, K. M. (2019). Crowdfunding as financial option for small and medium enterprises in Nigeria.Pertanika Journal of Scholarly Research Reviews, 4(3), 89-96.
Ajayi, B. (2016). The impact of entrepreneurial orientation and networking capabilities on the export performance of Nigerian agricultural SMEs. Journal of Entrepreneurship and Innovation in Emerging Economies, 2(1), 1-23.
Amoah, S. K., & Amoah, A. K. (2018). The role of small and medium enterprises to employment in Ghana. International Journal of Business and Economics Research, 7(5), 151.
Badini, O. S., Hajjar, R., & Kozak, R. (2018). Critical success factors for small and medium forest enterprises: a review. Forest Policy and Economics, 94, 35-45.
Bbaale, E. (2018). Infrastructure quality and firm productivity in Africa. World Journal of Entrepreneurship, Management and Sustainable Development.14(4) 367-384
Boohene, R. (2018). Entrepreneur’s social capital and firm growth: the moderating role of access to finance. Journal of Enterprising Culture.26(03), 327-348.
Carlin, W., Schaffer, M. E., & Seabright, P. (2010). A framework for cross-country comparisons of public infrastructure constraints on firm growth.Centre for Economic Policy Research, 1-60.https://papers.ssrn.com/sol3/papers.cfm?abstract
Del-Vecchio, P., Di-Minin, A., Petruzzelli, A. M., Panniello, U., & Pirri, S. (2018). Big data for open innovation in SMEs and large corporations: Trends, opportunities, and challenges. Creativity and Innovation Management, 27(1), 6-22.
Effiom, L., & Edet, S. E. (2018). Success of small and medium enterprises in Nigeria: do environmental factors matter?.Journal of Economics and Sustainable Development, 9(4), 117-128
Famous I. O., Fandi, G., Muller, Z., Svec, J., &Tlusty, J. (2017).Effect of improved electricity product development on the business performance of a public electricity transmission company. In Power Africa, 46-51, retrieved from https://ieeexplore.ieee.org/abstract/document/7991198/
Farran, I., & Fawaz, M. (2018). Role of SMEs in Lebanese economy. Journal of Economics and Management Sciences, 1(2), 78-78.
Galkina, T., & Kock, S. (2011). The influence of entrepreneurial infrastructure on entrepreneur networking: a comparative case study of Russian and Finnish founding teams. International Journal of Entrepreneurship and Small Business, 13(3), 238-254.
Galvao, A., Ferreira, J. J., & Marques, C. (2018). Entrepreneurship education and training as facilitators of regional development: a systematic literature review. Journal of Small Business and Enterprise Development, 25(1), 17-40
Goodwin, G. (2018). Water, infrastructure and power: contention and resistance in post-colonial cities of the south. Development and Change, 49(6), 1616-1630.
Igwe, P. A., Ogundana, A. N. A. O. M., Egere, O. M., & Anigbo, J. A. (2018). Factors affecting the investment climate, SMEs productivity and entrepreneurship in Nigeria. European Journal of Sustainable Development, 7(1), 182-200.
Islam, A., & Hyland, M. (2018).The drivers and impacts of water infrastructure reliability.1-40 retrieved from https://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-8637
Joshi, V & Mihreteab, G (2016). Critical success factors of micro & small enterprises in Ethiopia: A Review, International Journal of Science and Research, 5 (10), 1056 – 1060
Lampadarios, E (2016). Critical success factors for SMEs: an empirical study in the UK chemical distribution industry. International journal of Business Management, 11 (7), 67–82.
Limi, A. (2011). Effects of improving infrastructure quality on business costs: evidence from firm level data in Eastern Europe and Central Asia. The Developing Economies, 49(2), 121-147.
Manggat, I., Zain, R., & Jamaluddin, Z. (2018). The impact of infrastructure development on rural communities: a literature review. International Journal of Academic Research in Business and Social Sciences, 8(1), 647-658.
Medakovic, V., & Vaskovic, S. (2018). Categories and general characteristics of entrepreneurial infrastructure. Supporting University Ventures in Nanotechnology, Biomaterials and Magnetic Sensing Applications 25-45. DOI 10.1007/978-3-319-61237-9_2
Mohammed, U. D., & Obeleagu-Nzelibe, C. G. (2015). Entrepreneurial skills and profitability of small and medium enterprises: resource acquisition strategies for new ventures in Nigeria. In Proceedings of 25th International Business Research Conference 64(16), 1-21.
Moyo, B. (2013). Power infrastructure quality and manufacturing productivity in Africa: a firm- level analysis. Energy Policy, 61, 1063-1070.
Nganga, S. I., Onyango, G. M., & Kerre, B. W. (2011). Determinants of SMEs growth (wood enterprises): infrastructure, technology and collective efficiency. Journal of Geography and Regional Planning, 4(8), 498-504.
Nyoni, T., & Bonga, W. G. (2018). Anatomy of the small & medium enterprises critical success factors in Zimbabwe: introducing the 3E model. Journal of Business and Management 1(2) 01-18.
Oduyoye, O. O., Adebola, S. A., & Binuyo, A. O. (2013). Empirical Study of infrastructure support and small business growth in Ogun State, Nigeria. Journal of Research and Development, 1(1), 14-22.
Okoli, C., Mbarika, V. W., & McCoy, S. (2010). The effects of infrastructure and policy on e-business in Latin America and Sub-Saharan Africa. European Journal of Information Systems, 19(1), 5-20.
Okpara, J. O. (2011). Factors constraining the growth and survival of SMEs in Nigeria: implications for poverty alleviation. Management Research Review, 34(2), 156-171.
Oluwaseun, Y., & Moruf, O. (2018).Impact of ICT adoption on the performance of small and medium scale food and beverages firms in Nigeria. International Journal of Advances in Management and Economics, 3(3), 45-52.
Oyeyemi, A. M., Akoko, A. A., & Akungba. (2018). Disaggregate energy supply and industrial output in nigeria. International Journal of Economics, Business and Management Research, 2(2), 154-172.
Petkovic, S., & Tesic, J. (2013).SMEs and entrepreneurship development and institutional support in Republic of Srpska (Bosnia and Herzegovina).In Entrepreneurship in the Balkans, 293-315, DOI 10.1007/978-3-642-36577-5_15.
Sen, S. K., & Ongsakul, V. (2018). Urban climate-proof finance for disaster-resilient infrastructure: issues on competitiveness and sustainability. Environment and Urbanization ASIA, 9(2), 127-137.
Thanki, S. J., & Thakkar, J. (2018). Interdependence analysis of lean-green implementation challenges: a case of Indian SMEs. Journal of Manufacturing Technology Management, 29(2), 295-328.
Abdul, M., Gunasagaran, K., Kamarudin, N. A., & Mizanur, M. (2017). Critical success factors and challenges of women entrepreneurs in Klang Valley, Malaysia. Journal of Advanced Research in Business and Management Studies, 6(1), 12-23.
Abdullahi, M. S., Ghazali, P. L., Awang, Z., Mohd T. I., Ali, M., & Salim, N. A. (2015). The effect of finance, infrastructure and training on the performance of small and medium scale enterprises (SMEs) in Nigeria. International Journal of Business and Technopreneurship, 5(3), 421-452.
Aftan, Y., & Hanapi, M. (2018). The impact of entrepreneurial motivation on small business performance in Iraq. International Journal of Academic Research in Business and Social Sciences, 8(1), 409-419.
Ahmad, K. M. (2019). Crowdfunding as financial option for small and medium enterprises in Nigeria.Pertanika Journal of Scholarly Research Reviews, 4(3), 89-96.
Ajayi, B. (2016). The impact of entrepreneurial orientation and networking capabilities on the export performance of Nigerian agricultural SMEs. Journal of Entrepreneurship and Innovation in Emerging Economies, 2(1), 1-23.
Amoah, S. K., & Amoah, A. K. (2018). The role of small and medium enterprises to employment in Ghana. International Journal of Business and Economics Research, 7(5), 151.
Badini, O. S., Hajjar, R., & Kozak, R. (2018). Critical success factors for small and medium forest enterprises: a review. Forest Policy and Economics, 94, 35-45.
Bbaale, E. (2018). Infrastructure quality and firm productivity in Africa. World Journal of Entrepreneurship, Management and Sustainable Development.14(4) 367-384
Boohene, R. (2018). Entrepreneur’s social capital and firm growth: the moderating role of access to finance. Journal of Enterprising Culture.26(03), 327-348.
Carlin, W., Schaffer, M. E., & Seabright, P. (2010). A framework for cross-country comparisons of public infrastructure constraints on firm growth.Centre for Economic Policy Research, 1-60.https://papers.ssrn.com/sol3/papers.cfm?abstract
Del-Vecchio, P., Di-Minin, A., Petruzzelli, A. M., Panniello, U., & Pirri, S. (2018). Big data for open innovation in SMEs and large corporations: Trends, opportunities, and challenges. Creativity and Innovation Management, 27(1), 6-22.
Effiom, L., & Edet, S. E. (2018). Success of small and medium enterprises in Nigeria: do environmental factors matter?.Journal of Economics and Sustainable Development, 9(4), 117-128
Famous I. O., Fandi, G., Muller, Z., Svec, J., &Tlusty, J. (2017).Effect of improved electricity product development on the business performance of a public electricity transmission company. In Power Africa, 46-51, retrieved from https://ieeexplore.ieee.org/abstract/document/7991198/
Farran, I., & Fawaz, M. (2018). Role of SMEs in Lebanese economy. Journal of Economics and Management Sciences, 1(2), 78-78.
Galkina, T., & Kock, S. (2011). The influence of entrepreneurial infrastructure on entrepreneur networking: a comparative case study of Russian and Finnish founding teams. International Journal of Entrepreneurship and Small Business, 13(3), 238-254.
Galvao, A., Ferreira, J. J., & Marques, C. (2018). Entrepreneurship education and training as facilitators of regional development: a systematic literature review. Journal of Small Business and Enterprise Development, 25(1), 17-40
Goodwin, G. (2018). Water, infrastructure and power: contention and resistance in post-colonial cities of the south. Development and Change, 49(6), 1616-1630.
Igwe, P. A., Ogundana, A. N. A. O. M., Egere, O. M., & Anigbo, J. A. (2018). Factors affecting the investment climate, SMEs productivity and entrepreneurship in Nigeria. European Journal of Sustainable Development, 7(1), 182-200.
Islam, A., & Hyland, M. (2018).The drivers and impacts of water infrastructure reliability.1-40 retrieved from https://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-8637
Joshi, V & Mihreteab, G (2016). Critical success factors of micro & small enterprises in Ethiopia: A Review, International Journal of Science and Research, 5 (10), 1056 – 1060
Lampadarios, E (2016). Critical success factors for SMEs: an empirical study in the UK chemical distribution industry. International journal of Business Management, 11 (7), 67–82.
Limi, A. (2011). Effects of improving infrastructure quality on business costs: evidence from firm level data in Eastern Europe and Central Asia. The Developing Economies, 49(2), 121-147.
Manggat, I., Zain, R., & Jamaluddin, Z. (2018). The impact of infrastructure development on rural communities: a literature review. International Journal of Academic Research in Business and Social Sciences, 8(1), 647-658.
Medakovic, V., & Vaskovic, S. (2018). Categories and general characteristics of entrepreneurial infrastructure. Supporting University Ventures in Nanotechnology, Biomaterials and Magnetic Sensing Applications 25-45. DOI 10.1007/978-3-319-61237-9_2
Mohammed, U. D., & Obeleagu-Nzelibe, C. G. (2015). Entrepreneurial skills and profitability of small and medium enterprises: resource acquisition strategies for new ventures in Nigeria. In Proceedings of 25th International Business Research Conference 64(16), 1-21.
Moyo, B. (2013). Power infrastructure quality and manufacturing productivity in Africa: a firm- level analysis. Energy Policy, 61, 1063-1070.
Nganga, S. I., Onyango, G. M., & Kerre, B. W. (2011). Determinants of SMEs growth (wood enterprises): infrastructure, technology and collective efficiency. Journal of Geography and Regional Planning, 4(8), 498-504.
Nyoni, T., & Bonga, W. G. (2018). Anatomy of the small & medium enterprises critical success factors in Zimbabwe: introducing the 3E model. Journal of Business and Management 1(2) 01-18.
Oduyoye, O. O., Adebola, S. A., & Binuyo, A. O. (2013). Empirical Study of infrastructure support and small business growth in Ogun State, Nigeria. Journal of Research and Development, 1(1), 14-22.
Okoli, C., Mbarika, V. W., & McCoy, S. (2010). The effects of infrastructure and policy on e-business in Latin America and Sub-Saharan Africa. European Journal of Information Systems, 19(1), 5-20.
Okpara, J. O. (2011). Factors constraining the growth and survival of SMEs in Nigeria: implications for poverty alleviation. Management Research Review, 34(2), 156-171.
Oluwaseun, Y., & Moruf, O. (2018).Impact of ICT adoption on the performance of small and medium scale food and beverages firms in Nigeria. International Journal of Advances in Management and Economics, 3(3), 45-52.
Oyeyemi, A. M., Akoko, A. A., & Akungba. (2018). Disaggregate energy supply and industrial output in nigeria. International Journal of Economics, Business and Management Research, 2(2), 154-172.
Petkovic, S., & Tesic, J. (2013).SMEs and entrepreneurship development and institutional support in Republic of Srpska (Bosnia and Herzegovina).In Entrepreneurship in the Balkans, 293-315, DOI 10.1007/978-3-642-36577-5_15.
Sen, S. K., & Ongsakul, V. (2018). Urban climate-proof finance for disaster-resilient infrastructure: issues on competitiveness and sustainability. Environment and Urbanization ASIA, 9(2), 127-137.
Thanki, S. J., & Thakkar, J. (2018). Interdependence analysis of lean-green implementation challenges: a case of Indian SMEs. Journal of Manufacturing Technology Management, 29(2), 295-328.