11.3 Determinants of Entrepreneurial Success in Micro and Small Enterprises in Addis Ababa, Ethiopia
Abstract
Since1992, following the World Bank and IMF’s Structural Adjustment Program, a series of reform programs that are aimed at transforming the economy from a quais-communist command structure to a market economy have been initiated and implemented in Ethiopia. In recognition of the significance of micro and small enterprises (MSEs), the government issued a National Micro and Small Enterprises Strategy in 1997 and established the Federal Micro and Small Enterprises Development Agency in 1998. The country’s industrial policy in 2003 and the poverty reduction strategy in 2006 have singled out MSEs as major instruments for creating a productive and vibrant sector to reduce poverty. The role of MSEs has been argued to be the sector that may serve as a “seedbed” of entrepreneurship, with entrepreneurs graduating to run large industries (McPherson, 1996). Such a seedbed might be especially important given the role of entrepreneurship in economic development (Kilby, 1971). Thus, this study was conducted to identify the determinants of entrepreneurial success of MSEs in the manufacturing, construction, urban agriculture, trade and service sectors.
The study used primary data from interviews conducted with one hundred MSE operators and four government officials in Addis Ababa, and secondary data from Federal MSEDA’s Bulletin 2014, the Federal MSE Development agency database and Directory 2014. Through a descriptive and quantity study, the research intended to describe and verify determinants of MSE’s success. The hypothesis was that entrepreneurial success is significantly determined by three factors: individual dimensions, organizational dimensions and the external environment. The study used an interview guide and Statistical Package for the Social Sciences (SPSS) for data organization and analyses using descriptive, correlation and multiple linear regressions. Based on the results of the study, MSE's success is determined by multi-dimensional factors of individual, institutional and external dimensions rather than a single factor.`
11.3 Determinants of Entrepreneurial Success in Micro and Small Enterprises in Addis Ababa, Ethiopia
1920 Sangren Hall
Since1992, following the World Bank and IMF’s Structural Adjustment Program, a series of reform programs that are aimed at transforming the economy from a quais-communist command structure to a market economy have been initiated and implemented in Ethiopia. In recognition of the significance of micro and small enterprises (MSEs), the government issued a National Micro and Small Enterprises Strategy in 1997 and established the Federal Micro and Small Enterprises Development Agency in 1998. The country’s industrial policy in 2003 and the poverty reduction strategy in 2006 have singled out MSEs as major instruments for creating a productive and vibrant sector to reduce poverty. The role of MSEs has been argued to be the sector that may serve as a “seedbed” of entrepreneurship, with entrepreneurs graduating to run large industries (McPherson, 1996). Such a seedbed might be especially important given the role of entrepreneurship in economic development (Kilby, 1971). Thus, this study was conducted to identify the determinants of entrepreneurial success of MSEs in the manufacturing, construction, urban agriculture, trade and service sectors.
The study used primary data from interviews conducted with one hundred MSE operators and four government officials in Addis Ababa, and secondary data from Federal MSEDA’s Bulletin 2014, the Federal MSE Development agency database and Directory 2014. Through a descriptive and quantity study, the research intended to describe and verify determinants of MSE’s success. The hypothesis was that entrepreneurial success is significantly determined by three factors: individual dimensions, organizational dimensions and the external environment. The study used an interview guide and Statistical Package for the Social Sciences (SPSS) for data organization and analyses using descriptive, correlation and multiple linear regressions. Based on the results of the study, MSE's success is determined by multi-dimensional factors of individual, institutional and external dimensions rather than a single factor.`