1Research Scholar in Entrepreneurship and Innovation, School of Management Studies, Punjabi University, Patiala, India
2Head, School of Management Studies Dean, Faculty of Business Studies, Punjabi University, Patiala, India
Online published on 12 May, 2017.
Micro and small enterprises are considered as the engine of economic growth in Ethiopia. However, enterprises facing various challenges that place them in the vulnerable business position, which are not merely solved by financial support. It is repeatedly acknowledged that having adequate finance does not mean the problems are solved and started to enhance performance. Rather there are other non-financial supports, which are exercising in developing countries including Ethiopia, commonly known as business development service. Hence, the main o bjective of the study was to investigate the role of business development service on the performance of micro and small manufacturing enterprises in Adddis Ababa, Ethiopia. The data were collected through scheduled questionnaire, personal interview, and document review. 370 respondents were selected via multi-stage sampling technique. Descriptive statistics, one way ANOVA, and linear regressions were used for the purpose of data analysis. Factor analysis was used to check the construct validity and have a value for performance, BDS, and its dimensions for regression. The study demonstrated that the overall practice of business development service was low, which need to be improved. The study also revealed that all BDS dimensions individually and jointly have a significant and positive effect on the performance of micro and small enterprises. More specifically, input supply, market access, and infrastructure facilities were the most important factors of MSE's performance, which should be underline while developing MSE strategy. This study contributes to theory since it empirically demonstrated that BDS has an impact on performance of MSEs in Ethiopia. It also significant to provide opportunity for MSEs owners, government, business practitioners, policy makers, and other development partners to make informed decision and choice best strategy that help to enhance MSE's performance.
Business Development Service, Performance, Micro and Small Enterprises, Manufacturing Sector, Addis Ababa, Ethiopia
