The antecedents of success among small- and medium-sized enterprises: evidence from Ghana

Globally, small- and medium-sized enterprises (SMEs) are regarded as highly crucial to economic growth given their strategic role in job creation and the payment of tax to respective governments. In Ghana for instance, SMEs account for about two thirds of GDP and 92% of businesses. This study investigates the antecedents of success among SMEs in Ghana. It specifically analysed the impact of internal factors, entrepreneurial orientation, managerial competence and technological capabilities, and external factors such as access to external capital/finance, human resource capabilities and government policies/practices on the growth and success of SMEs. In assessing the determinants of success among Ghanaian SMEs, the study also provided suggestions on how they could be adequately empowered to contribute to economic growth. A mixed method approach was adopted for the study. For the qualitative data collection method, a semi-structured interview guide was used to solicit information from ten (10) SME managers/owners. Twelve main themes emerged from the interviews conducted. A cross-sectional survey which utilized a random sampling approach with a structured questionnaire was used for the collection of quantitative data from 350 SMEs. Data was analysed using descriptive and multivariate analysis. The correlation and regression results revealed that managerial competence, access to external capital/finance and government policies/practices were significantly associated with success (measured using effectiveness, efficiency of business systems) of SMEs while technological capabilities, human resource capabilities and entrepreneurial orientation were not significantly related to the success of SMEs. The study therefore recommends that SMEs in Ghana need to exploit non-traditional avenues to raise funds to reduce their over-reliance on traditional financial institutions. Further, measures to reduce institutional bottlenecks (such as understaffed regulatory bodies) and provide adequate market information to SMEs are crucial.