DETERMINANTS OF ENTREPRENEURIAL SUCCESS OF MICRO AND SMALL ENTERPRISES IN THE CASE OF GURAGE ZONE

Abstract

The aim of this study was to investigate the determinants of the entrepreneurial success of MSEs operating in Gurage Zone. Descriptive and explanatory research design along with quantitative and qualitative approach was employed. 327 from 4705 owners/managers of all functional and formally registered MSEs in Gurage Zone have been participated in the study. Simple randomsampling, proportionate stratified and purposive sampling techniques were employed to select administrative towns and woredas, to set the number of owners/managers, and to select heads of the selected woredas’ Enterprise and Industry Development Department of Gurage Zone. The study used questionnaire and interview to collect primary data. Descriptive and inferential statistics such as correlation coefficient as well as multiple linear regression model was used to analyze the quantitative data with the help of Statistical Package for Social Science version 20. As to the qualitative data analysis, it was narrated systematically using content analysis approach and supported the quantitative data analysis. The findings of the study revealed that the sixvariables – both the internal factors such as managerial competency and skill and entrepreneurskills; the four external factors - access to finance, access to land and working premises, access to training on business and technology and access to industry extension were significantly affected the entrepreneurial success of the selected MSEs. In this regard, 82.4% of the variations in the entrepreneurial success of the MSEs were jointly accounted by the six variables at 5% level of precision. Moreover, significant and positive correlation ranging from moderate to strong was observed between the six independent variables and the dependent variable – success. Therefore, this study suggests that, Enterprise and Industry Development Department of Gurage Zone better to intervene and facilitate financial support, provide suitable work places, encourage the growth and development of those enterprises. Moreover, government bodies and stakeholders should design training programs through which owners can develop their managerial and entrepreneurial skills.