What are the biggest obstacles to growth of SMEs in developing countries? – An empirical evidence from an enterprise survey
By Yao Wang. 2016
402 citations recorded by the source corpus.
SMEs are drivers of economic growth and job creation in developing countries. It is paramount to determine the factors that hinder their growth. This paper uses the Enterprise Survey from the World Bank which covers data from 119 developing countries to investigate the biggest obstacles SMEs are confronting and the determinants that influence the obstacles as perceived by enterprise managers. The results show that SMEs perceive access to finance as the most significant obstacle which hinders their growth. The key determinants among firms' characteristics are size, age and growth rate of firms as well as the ownership of the firm. The latter – the role of the state in financing SME – is particularly intriguing. External reasons for the financing dilemma are also examined. It is shown that the main barriers to external financing are high costs of borrowing and a lack of consultant support.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/1700e2c56cae27ef2c5dfbdf9101b40baeacd616
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In Economics and Econometrics
Citations in the corpus
- Role of Government to Enhance Digital Transformation in Small Service Business (2021, background): “Small businesses have many limitations, including limited access to funding, lack of managerial skill, lack of technology capabilities, limited access to raw materials, and restricted infrastructure availability, that restrain them from expanding and growing their business [26,27].”
- Small and Medium-Sized Enterprises (SMEs): The Engine of Economic Growth through Investments and Innovation (2020, neutral): “Wang [54] exhibited the most significant impediments observed by SMEs managers, namely “access to finance”, “tax rate”, “competition”, “electricity” and “political factors”.”
- A Social Enterprise Approach to Empowering Micro, Small and Medium Enterprises (SMEs) in Indonesia (2020, background): “The Enterprise Survey of the World Bank 2016, which covered data from 119 developing countries to investigate the biggest obstacles for SMEs, showed that SMEs perceive access to finance as the most significant obstacle to their growth [5].”
- A Review of the Recent Developments of Green Banking in Bangladesh (2021, background): “The banking institutions are the key actors in the financial system and occupy a significant position in the global economy [43,44].”