Performance of microenterprises in Ghana: a resource-based view

Type Journal Article - Journal of Small Business and Enterprise Development
Title Performance of microenterprises in Ghana: a resource-based view
Volume 16
Issue 3
Publication (Day/Month/Year) 2009
Page numbers 466-484
Purpose – The purpose of this paper is to assess the financial performance of microenterprises in Ghana by applying the resource-based theory of the firm. Specifically, it is tested that if firm-specific resources dominate sector and market-wide effects in explaining microenterprise performance, as suggested by the resource-based theory.

Design/methodology/approach – The relevant literature for both microenterprise performance and the resource-based theory is reviewed. Data from the 1998/1999 Ghana Living Standards Survey are analysed using ordinary least squares, followed by robustness checks.

Findings – Factors embodied in firm-specific resources jointly impact enterprise performance. However, sector/market factors also play a role, suggesting that the interaction between microenterprise, sector, and market factors helps explain enterprise performance.

Research limitations/implications – All the constructs of the resource-based theory cannot be tested due to data limitations.

Originality/value – Small enterprises play a key role in promoting developing country growth, but no study has evaluated microenterprise performance using this particular data set and the resource-based theory of the firm. Future research should focus on collecting data to further validate this theory

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