The Role of Business Environment on the Establishment of Small and Medium Scale Enterprises in Taraba State

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 16 October 2019

The Role of Business Environment on the Establishment of Small and Medium Scale Enterprises in Taraba State

Jerome Nyameh, Maiyaki Hosea Ibrahim, Victor Timothy, Hamisu Idrus

Taraba State University Jalingo, Nigeria

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10.31014/aior.1992.02.04.152

Pages: 1073-1083

Keywords: Business Environment, Establishment of SMEs and Taraba State

Abstract

The research study examines the role of business environment on the establishment of small and medium scale enterprises in Taraba State. To achieve that the following research objectives were formulated; (i) to determine the impact of external business environmental on the developing SMEs in Taraba state, (ii) to evaluate the existing SMEs in Taraba State, (iii) to analyze problems of developing of SMEs in Taraba state, (iv) Examine the link between business environment and SMEs In Taraba State. The research method adopted was quantitative technique were Data collected were and analyzed using Statistical Package for Social Scientists (SPSS) Version 26. A total of three hundred and twenty-four (324) copies of the questionnaire were administered, out of which three hundred and sixteen (316) copies representing (97.5%) of the questionnaire were properly completed and retrieved while eight (8) copies representing (2.5%) were not retrieved. The data were presented in tables as frequency distribution in the data analysis; the techniques of percentage frequencies, mean and standard deviation were used. The hypotheses were tested with chi-square and multiple regression method at 5% significance level. The result shows that gender, age, education level, risk-taking and employee's skills have no significant relationship with business growth while years of experience with (P-value =0.032) have a significant relationship with business growth. The test also revealed that there was a statistically significant association existing between size of sales (P-value=0.001< 0.05), gained profit (P-value=0.0026 < 0.05), credit control (P-value=0.015< 0.05), location (P-value=0.009< 0.05) and access to fund (P-value=0.014< 0.05) with business establishment in the business environment. Regression analysis was used to check relative contribution of business environment (Internal Factors) on Business Growth Using Regression Analysis. The result indicated that size of sales, credit control, financial management practices have significant effect on the business growth of SMEs with P-value< 0.05. Furthermore, from the regression output for effect of external factors on business growth, it also revealed that location, access to fund has significant effect on the business growth of SMEs with P-value< 0.05. regression analysis also indicated that government regulation, government agency, sundry bill, access to fund and bureaucratic process have significant effect on business growth in Taraba State. Consequently, both internal and external business environmental factors have significant effect on the establishment of SMEs in Taraba state.

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