Does Size Matter in Determining Growth of Micro, Small and Medium Enterprises (MSMEs) in Zimbabwe ()
ABSTRACT
Micro, Small and Medium Enterprises (MSMEs)
are increasingly becoming the dominant players in the economies of most
countries especially in Sub Saharan Africa,
constituting 97% to 99% of industry. What is worrisome though, is the
high rate of failure and absence of growth in this sector despite various
interventions to promote their growth which is inhibiting the contribution to
economic development. This study sought to determine whether the size of
enterprise affects the impact of various determinants of MSMEs growth in
Zimbabwe. It used 2012 Finscope national MSMEs survey data which was modeled
using probit model on a sample of 3222 MSMEs with growth as the binary
dependent variable. The sector was divided into three main categories being
individual, micro and the small to medium categories. The growth determinants that proved robust include, age of the firm,
motivation, and education background of entrepreneur and sector whose
coefficients were found to be significant in
at least two of the three subcategories in addition to being significant in the
main overall model. The legal form, tax status, banking status, exports and
prior sector experience variables produced mixed results with coefficients
being significant in at least one of the three subcategories to reflect
peculiarities in the respective categories which had been lost in the
aggregated model. Thus, for MSMEs growth policies to be effective, there is
need to incorporate these peculiarities with respect to various size
categories.
Share and Cite:
Chundu, M. , Pindiriri, C. and Kaseke, N. (2020) Does Size Matter in Determining Growth of Micro, Small and Medium Enterprises (MSMEs) in Zimbabwe.
Open Journal of Business and Management,
8, 1888-1907. doi:
10.4236/ojbm.2020.84115.