Professional Documents
Culture Documents
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Key words: MSEs, Performance, business development service (BDS)
Introduction
Micro and small enterprises (MSEs) have been regarded to play significant roles of job creation,
poverty alleviation, and economic development of many countries worldwide. MSEs play a key
role in triggering and sustain economic growth and equitable development in both developed and
developing countries (Lawrence & Maurice, 2012; Stella, 2014). According to Lawrence and
Maurice (2012) survey conducted in Botswana, Malawi, Eritrea, Swaziland and Zimbabwe
underscored the importance of MSEs Sector especially in employment creation and income
generating.
Micro and small enterprise development hold a strategic place within Ethiopia’s Industrial
Development Strategy. All the more so as MSEs are the key instruments of job creation in urban
centers, whilst job creation is the centerpiece of the country’s development plan. The role of MSEs
as the principal job creators is not only promoted in low income countries like Ethiopia, but also in
high income countries including the United States of America. Accordingly, because MSEs play a
pivotal role in employment creation, stimulating and strengthening MSE development should be
one of Ethiopia’s top development priorities (FeMSEDA 2011).
Scholars recognized that financial support merely does not have business growth result for micro
and small enterprises (Esim, 2001; Cohen, et.al 1996) because; they have mainly constrained by
non-financial factors (Nkonoki, 2010). Thus, it is suggested that micro and small enterprises need
to be supported through different array of non-financial service, which is commonly called
business development services/supports (BDS). Moreover, CDASED (2001) also underline that
business development services is one of the most important supports to improve micro and small
enterprises’ performance in developing countries (Ashenafi, 2016).
The term ‘business service’ refers to the range of non financial services provided to small and
micro enterprises (MSEs) at various stages in their development. The services that contained with
the broad concepts are such activities as group training, individual counseling and advice, the
development of new commercial entities, technology development and transfer, information
provision, business links and policy advocacy (Miehlbradt, A. &McVay, m., 2004)
Business Development Services (BDS) are services that improve the performance of the enterprise,
its access to markets, and its ability to compete. The definition of ‟business development service
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‟includes an array of business services such as training, consultancy, marketing, information,
technology development and transfer, business linkage promotion, both strategic (medium to long
term issues that improve performance) and operational (day-to- day issues). BDS are designed to
serve individual businesses, as opposed to the larger business community” (Committee of Donor
Agencies for Small Enterprise Development, 2001).
Generally, like other towns in Ethiopia MSEs in Debre tabor town, are facing problems made
worse by remoteness to various services, difficulties of accessing information, alternative finance
and lack of institutional support shortage of marketing and production shade, market development
and value chain service. Due to this, large number of enterprises may dissolve and go out of
business in the process and only very few about 1% of the enterprises grow to medium and higher
level ((FeMSEDA 2011)
This paper will see the various business development services that the Debre Tabor town
Administration had committed to achieve in its strategic plan and identify the impact of these
services contribute to the performance of these MSEs found in Debre Tabor Town. The paper will
also investigates the important services and/or supports that the government committed help to
MSEs and its impact on the success of MSEs.
General objective
The overall objective of this study is to assess the effect of Business Development Service (BDS)
provision in improving the performance of SMEs in Debre Tabor town.
Specific objectives
1. To investigate the influence of market access for the performance of MSEs in the case of Debre
Tabor
2. To identify the influence of technology and product development on the performance of MSEs
in the case of Debre Tabor
3. To identify the influence of input supply on the performance of MSEs in the case of Debre
Tabor
4. To identify the influence of training and technical support on the performance of MSEs in the
case of Debre Tabor
5. To identify the influence of infrastructure facility on the performance of MSEs in the case of
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Debre Tabor
Infrastructure facility
Performance of MSEs
Market share
Business expansion
Technology &
product development
Research methodology
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Research Approach
According to (Zikmund 2003) there are two basic types of research design: qualitative and
quantitative and a hybrid of the two. The choice of research design centers on the nature of the
research the setting, the possible limitations and the underlying paradigm that informs the research
project. Since the purpose of this study is to obtain complete and adequate information on the issue
in BDS and the resulting MSEs Performance, the research design for this study was descriptive
and explanatory research. And the researcher was use both quantitative and qualitative data which
was obtained through the questionnaire that was distribute to employees and managers of MSEs,
and interview sessions with the BDS providers in the MSEs development office and poly
technique college in Debre Tabor town was conducted.
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sample size was determined using the appropriate sample size determination method. There are
two methods for determining the size of the sample (Kothari, 2004). The first is specifying the
precision of estimation approach which is frequently used and appropriate one and the second is
using Bayesian statistics to weight the cost of additional information against the expected value of
the additional information. This approach is not commonly used because of difficulty in measuring
the value of information. Accordingly, this study was used the first approach to determine the
sample size. Since the population from which the sample drawn is finite, the following formula is
applied to calculate the sample size (Kothari, 2004).
2
Z . p.q. N
n = 2 ( N −1 )+¿ Z
2. p .q
e ¿
n = Sample size
q = 1-p
Z = the standard variant at a given confidence level and can be obtained from
The table showing area under the normal curve (the common is at 95%
sample size was 238. Here, the maximum and the most conservative sample size (p=0.5) is taken
for this sample size determination.
Having the total sample size of 238, MSEs were stratified into four stratum based on the sub sector
they are operating; wood& metal work (139), textile and garment (128), food and food processing
(117), and services (239) and then by using probability proportional to size sampling (PPS)
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method, the sample size was drawn from each stratum. Accordingly, wood& metal work
=238(139/623)=53, textile and garment =238(128/623)=49, food and food processing
=238(117/623)=45 and for services =238(239/623)=91 samples were selected. From the total
respondents 123 sample respondents from sole proprietorship and 115 respondents from
partnership form of business were selected conveniently. Finally, simple random sampling method
was used to select the sample respondents from each stratum.
Because of BDS providers are manageable in size, 10 experts who provide the services were
included from Debre Tabor MSEs office and Debre Tabor poly Technique College for the
interview session.
In the data processing procedure, editing, coding, classification and tabulation of the collected data
was done before proceeding to analysis. Then, descriptive statistics as well as inferential and
regression analysis was applied to analyze quantitative data obtained through questionnaire
regarding BDS factors that determines performance of MSEs. The researcher was also applied
Statistical Package for Social Sciences (SPSS) project version-20 to process statistical tasks.
Qualitative data obtained from government officials, BDS experts were analyzed also through
narration and discussions.
Descriptive Analysis
Descriptive analysis was used to reduce the data in to a summary format by tabulation (the data
arranged in a table format) and measure of central tendency (mean and standard deviation).
Moreover, pie charts and bar were used to describe the general characteristics of enterprises. The
reason for using descriptive statistics was to compare the different factors. In descriptive analysis
of the study, mean score 3.8 and above, 3.4 -3.79, and 3.39 and below were considered as high,
moderate, and low respectively, which is adopted from previous researches (Pihie and Akmaliah,
2009; and Mekdes, 2015, cited Ashenafi 2016). The mean score and standard deviation of both
dependent and independent variables and analysis of variance (ANOVA) was analyzed since the
result of analysis gives the information about the BDS provided for MSEs is in a right situation or
not and which dimension of BDS is provided in a better manner.
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Inferential Analysis
According to Sekaran (2000:401), inferential statistics allows to infer from the data through
analysis the relationship between two or more variables and how several independent variables
might explain the variance in a dependent variable. The following inferential statistical methods
were used in this study.
The Pearson Product Moment Correlation Coefficient
According to Phyllis and his associates (2007), inferences have a very important in management
research. This is so because conclusions are normally established on the bases of results. Such
generalizations were therefore, be made for the population from the samples. They speculate that
the Pearson Product Moment Correlation Coefficient is a widely used statistical method for
obtaining an index of the relationships between two variables when the relationships between the
variables is linear and when the two variables correlation are continuous. To ascertain whether a
statistically significant relationship exists between market access, technology and product
development, infrastructure facility, input supply, training and technical support, factors with
enterprise’s performance, the Product Moment Correlation Coefficient was used.
According to Duncan C. and Dennis H. (2004), correlation coefficient can range from -1 to +1.
The value of -1 represents a perfect negative correlation while a value of +1 represents a perfect
positive correlation. A value of 0 correlations represents no relationship. The results of correlation
coefficient may be interpreted as follows.
(-1.00 to -0.8= strong Negative, -0.8 to -0.6=Substantial Negative, -0.6 to -0.4 =Medium
Negative, -0.4 to -0.2= Low Negative, -0.2to 0.2 =Very Low
(1.00 to 0.8= strong positive, 0.8 to 0.6=Substantial positive, 0.6 to 0.4 =Medium positive, 0.4 to
0.2= Low positive, 0.2to 0.2 =Very Low
In this study Pearson’s Product Moment Correlation Coefficient was used to determine the
following relationships.
The relationship between market access factors and performance of MSEs;
Relationship between technology and product development factors and performance of MSEs;
The relationship between training and technical support factors and performance of MSEs;
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In this study multiple regressions was employed. Multiple regression analysis takes into account
the inter-correlations among all variables involved. This method also takes into account the
correlations among the predictor scores (John Adams, et al., 2007:198).
For the purpose of investigating the individual effect of BDSs on performance for MSEs the
researcher was followed multi dimensional (individual i.e. market access, infrastructure facility,
input supply, technology and product development, training and technical support effect)
approach. That means multiple linear regressions for individual effects of variables. Due to this the
researcher was followed multi dimensional approach and attempts to examine the individual share
of BDS dimensions to the MSE’s performance. Thus for this purpose linear regression analysis
would be applied. Because it provides information how a set of different variables are able to
predict a particular out come.
MSEper= β 0+ β 1 ( MA ) + β 2 ( IFF )+ β 3 ( TTS ) + β 4 ( IP )+ β 5 ( TPD )
MSEperf= performance of MSEs
MA= market access of BDS dimensions
IFF= infrastructure facility dimension of BDS
TTS= training and technical support dimension of BDS
IP = input supply dimension of BDS
TPD = technology and product development dimension of BDS
β0 is the intercept term- constant which would be equal to the mean if all slope coefficients are 0.
β1, β2, β3, β4, and β5 are the coefficients associated with each independent variable which
measures the change in the mean value of Y, per unit change in their respective independent
variables. Accordingly, this statistical technique was used to explain the following relationships.
Regress performance (as dependent variable) on the selected linear combination of the independent
variables using multiple regressions.
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To facilitate ease in conducting the empirical analysis, the results of descriptive analyses are
presented first, followed by the inferential analysis. The purpose of this study is to critically assess
the effect of business development service for the performance of MSEs in Debre Tabor town.
Data were collected from operators or owner managers of MSEs found in Debre Tabor town. Two
hundred thirty eight questionnaires were distributed across the four sub sectors in town of Debre
Tabor, out of which 236 were completed and retrieved successfully, representing 99% response
rate. Out of the 238 questionnaires administered 53, 49, 45, and 91 were distributed to wood and
metal work, textile and garment, food processing and service respectively. The numbers of
questionnaires retrieved from wood and metal work, textile and garment, food processing and
service are 53, 48, 45, and 90 respectively. This represents a response rate of 100%, 97.9%, 100%
and 98.9 % for wood and metal work, textile and garment, food processing and service
respectively.
Demographic characteristics
Regarding the gender of the respondents 163(69.1%) of respondents are male the rest 73(30.9%)
respondents are female. This shows the number of male and female involvement in such
enterprises are not equal or most of MSEs owners or enterprises members are male. As it is
indicated in the table below, from the total sample taken 28 (11.9%) respondents of enterprises are
with under the age of 25 years old. 137 (58.1%) MSEs in this study are the age range of 25 to 35
years. 59(25%) of the respondents are in the age range in between 36 to 46 years old. 11(4.7%) of
the respondents of the enterprises are 47 to 57 years old. The other 1(0.4%) of an enterprise who
got the BDS support above 58 years old. So BDS is provided for all enterprises but mostly the
service is provided for youths and adults enterprise owners. The other measurement is educational
level of the respondents. In this regard 7(3%) of the respondents were never attend formal
education, 30(12.7%) of the respondents were completed primary education, 75(31.8%) of the
respondents were completed secondary and preparatory education, 78(33.1%) of the respondents
were diploma (level 1-4) holders and the other 46(19.5%) of the respondents were graduated in
degree and above. From this we clearly understood that MSE office of the town and Debre Tabor
Polly technique college were provide the BDS service for any enterprises but they give priority to
support the enterprises who owned by professionals of degree and diploma. The study indicated
that 193(81.8%) of the respondents were managers of the business that they were operating while
43(18.2%) were employees of the business. In sole proprietor form of business all respondents are
managers of their business. So these all 43 respondents are within partnership form of business.
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Profile of the respondent
Regarding ownership as shown in the table above of the total respondents 122 (51.7%) MSEs are
owned and operated by one person as sole proprietorship. And the remaining 114 (48 .3%) are
owned by more than one person as a partnership.
The type of business sector
As shown in the figure below, the sample firms were operating in four sub sectors of the economy.
Most of them are engaged in services 38.1%, followed by wood and metal work (22.5%), textile
and garment (20.3%) and food processing (19.1%). This division of MSEs by sector type was
believed to be helpful to study each sector BDSs impact of the performance of MSEs. This is
because the BDSs were provided for different sectors of the enterprises. But the degree of
provision of the services was different across the sub sectors.
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Results of Measures of Central Tendency and Dispersion
BDSs are supports that offered to MSEs provided by public or other nongovernmental
organizations to improve performance of MSEs. This part explains the descriptive statistics
calculated on the basis of the BDS that influence the performance of MSEs. The results for
measures of central tendency and dispersion were obtained from the sample of respondents of
textile and garment, food processing and metal and wood works, services are shown in the
following tables
The effect of business development service on the performance of micro and small enterprise
Respondents were asked different questions regarding the BDS dimension affecting the
performance of MSEs in Debre Tabor town. Their responses are organized in the following
manner. According to (Pihie and Akmaliah, 2009; and Mekdes, 2015 cited from ashenafi , 2016)
In descriptive analysis of the study, mean score 3.8 and above, 3.4 – 3.79, and 3.39 and below
were considered as high, moderate, and low respectively, which is adopted from previous
researches so the BDS provided for MSEs in Debre Tabor town are based on this empirical study
as follows.
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Market access factors that affect the performance of MSEs
As it is indicated in the table above, the mean and standard deviation for the market access factors
were calculated. The table shows the market information has a mean score of 3.30 with a standard
deviation of 1.153 for wood and metal work, a mean score of 3.08 with standard deviation of 1.182
for textile and garment, mean score of 3.36 with standard deviation of 1.111 for food processing
and mean score of 3.28 with standard deviation of 1.290 for services. Therefore, it may be
concluded that market information is the main factor that affects the performance of all sectors.
This is followed by average score of the respondent’s response with regard to less support in
market information and related issues.
According to the table above, enterprises engaged in textile and garment, food processing, service
sectors the trade fair and bazaars support was not enough. The agreement on lack of support is
justified by the calculated means of 2.83, 3.2, and 3.2 with standard deviation of 1.260, 1.140, and
1.300 respectively. As shown above in the table for wood and metal work enterprises a moderate
support was provided. The agreement of this moderate support is justified by the mean score 3.51
and standard deviation 1.103 shows that, the operators of wood and metal work in MSEs agree
with the moderate support related to trade fair and bazaars.
From the table above the enterprises engaged in wood & metal work, textile and garment, food
processing and services very low support from BDS provider’s services regarding to product and
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service linkages. This is justified by using the mean scores as follows. Mean score of 2.60 with
standard deviation 1.305 for Wood& metal work, Mean score of 2.71 with standard deviation
1.352 for textile and garment, Mean score of 2.82 with standard deviation 1.211 for food
processing and Mean score of 3.10 with standard deviation 1.333 for services.
When the above responses compared with the interview conducted with key informants or MSE
experts, it was confirmed that there are problems related to providing the BDSs services because
they are incapable to address the services of all BDS dimensions.
Technology and product development factors that affect the performance of MSEs
According to the above table the mean and standard deviation of the enterprises shows the
respondents agreed there was enough support and provision of the BDSs regarding technology and
product development services for enterprises either from enterprises development office or Polly
Technique College. That is mean score of 3.57 with standard deviation of 0.971 for wood and
metal work justifies supports to enterprises regarding to increase its production efficiency is
moderate. Mean score of 3.33 with standard deviation of 1.191 for textile and garment justifies
there was not much enough support for textile and garment sector regarding to increase enterprises
production efficiency. Mean score of 3.67 with standard deviation of 0.853 for food and food
processing indicates there was a moderate support for enterprises services that increase production
efficiency for this food and food processing sector. Mean score of 3.70 with standard deviation of
1.043 for service sector also indicates there was a moderate provision of BDSs that increases
enterprises production efficiency. Mean score of 3.81 with standard deviation of 0.962 for wood
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and metal work, Mean score of 3.58 with standard deviation of 1.048 for textile and garment,
Mean score of 3.73 with standard deviation of 0.863 for food and food processing, and Mean score
of 3.79 with standard deviation of 1.011 for services justifies that wood and metal work enterprises
were obtained high support from enterprise development office and Polly Technique College
services that reduces production wastage of the enterprises. Enterprises engaged in textile and
garment, food and food processing sectors and services with mean score of 3.58, 3.73 and 3.79
justifies the sectors were obtained medium support from enterprise development office and Polly
Technique College services that reduces production wastage of the enterprises. Mean score of 2.75
with standard deviation of 1.108 for wood and metal work; Mean score of 2.44 with standard
deviation of 1.183 for textile and garment, Mean score of 2.51 with standard deviation of 0.991 for
food processing, Mean score of 2.96 with standard deviation of 1.160 for services, justifies
services related to new technology adaptation and transfer provided for all sector enterprises are
not enough according to respondents response and analyzed as above. Mean score of 3.87 with
standard deviation of 1.057 for wood and metal work; Mean score of 3.48 with standard deviation
of 1.111 for textile and garment, Mean score of 3.98 with standard deviation of 0.812 for food
processing, Mean score of 3.89 with standard deviation of 1.075 for services justifies high supports
were provided to increase production based on customers order of the enterprises.
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From the table above mean score of 2.51 with standard deviation of 1.085 for wood and metal
work, Mean score of 2.33 with standard deviation of 0.930 for textile and garment, Mean score of
2.84 with standard deviation of 1.021 for food processing and Mean score of 2.76 with standard
deviation of 1.154 for services of respondents response clarifies BDS services regarding linking of
enterprises from cheap raw material suppliers was mach law for all sectors of the enterprises.
Mean score of 2.43 with standard deviation of 1.029 wood and metal works; Mean score of 2.31
with standard deviation of 0.879 for textile and garment, Mean score of 2.89 with standard
deviation of 1.071 for food processing and Mean score of 2.77 with standard deviation of 1.112 for
services also clarifies BDS providers were not provided enough services like linking of new raw
material suppliers to those BDS user enterprises in all sectors. Mean score of 3.45 with standard
deviation of 1.084 for wood and metal work; Mean score of 3.52 with standard deviation of 1.052
for textile and garment, Mean score of 3.62 with standard deviation of 0.960 for food processing,
Mean score of 3.62 with standard deviation of 1.077 for services justifies BDS providers were
support or provide a moderate support regarding facilitation of enterprises to use right quality of
inputs for their production system. BDS providers were supported enterprises regarding to
facilitation of enterprises to enterprises for purchasing of raw material inputs in groups to
minimize costs. But the support that they were provided was not sufficient enough according to the
response of enterprise shown in the above table. It is shown as Mean score of 2.63 with standard
deviation of 0.936 for wood and metal work, Mean score of 2.42 with standard deviation of 0.871
for textile and garment, Mean score of 2.53 with standard deviation of 0.968 for food processing,
Mean score of 2.66 with standard deviation of 1.143 for services. These all above responses were
also confirmed by interview questions responses of key informants of both enterprise development
office experts and technique college teachers.
Training and technical support factors that affect the performance of MSEs
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food
Std. Deviation .968 .953 1.043 .919 1.021 .935
processing
Mean 4.06 3.96 3.98 4.22 4.03 3.84
Service
Std. Deviation .866 .873 .887 .845 .988 .873
Mean 3.94 3.91 3.95 4.23 4.02 3.93
Total
Std. Deviation .841 .878 .879 .874 .929 .835
From the table above all type of BDS services were provided properly for all sectors of enterprises.
Let’s show in detail as follows by considering mean score of the analysis. Mean score of 3.96 with
standard deviation of 0.649 for wood and metal work; Mean score of 3.75 with standard deviation
of 0.838 for textile and garment, Mean score of 3.87 with standard deviation of 0.968 for food
processing and Mean score of 4.06 with standard deviation of 0.866 for services. The mean scores
clarified that the all training and technical support services were provided for all sectors of the
enterprise as a high manner and it is able to support the business. As indicated in the table and it is
interpreted that respondents respond they have got the training and technical support components
in a better manner. They implement the trainings and their business performance was increased.
The responses analyzed above table also supported or confirmed by the response of interview
session with experts of enterprise development office and technique college teachers. According to
key informants disruption with the researcher these trainings were provide for enterprises by
professionals of technique college teachers. The training was held in different growth stages of the
enterprises.
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g
Mean 3.42 3.46 3.77 2.42
Service
Std. Deviation 1.199 1.201 1.122 1.049
Mean 3.37 3.43 3.86 2.52
Total
Std. Deviation 1.121 1.159 1.014 1.054
As shown in the above table infrastructure facilities are the most important factors that affect the
performance of the enterprises. Because of this government institutions enterprise development
office and technique colleges support enterprises by providing different infrastructure facilities and
the enterprise operators were asked by questionnaire in this research how this support
influences their business performance. Their response is analyzed in the above table. When we
interpret the mean score of each service, the first is the working premises with its mean is 3.53 and
its standard deviation is1.030, the second factor is storage and warehousing for enterprise with its
mean 3.66 and its standard deviation 1.018 and the third transportation and delivery for products
with a mean of 4.02 and standard deviation 0.866 and the fourth infrastructure support is power
and electricity with a mean of 2.70 and standard deviation of 1.102 for wood and metal works
sector. premises services for textile and garment sector were a mean of 3.06 and standard deviation
of 1.099, storage and wire housing with a mean of 3.10 and standard deviation of 1.207,
transportation and product delivery with a mean of 3.65 and standard deviation of 1.120, electricity
and power with a mean of 2.48 and standard deviation of 1.091. The mean and standard deviations
of other sectors for the services provide is clearly analyzed. From these we can conclude that
transportation facility, premises and warehousing services were provided for enterprises in a
moderate manner and the other support related to power and electricity were not enough provided
for enterprises. These also confirmed with the interview from key informants. That is there were so
many enterprise with no available for premises or shades and some others obtained a shade without
electricity and power and some others also did not their work because of frequent power
interruption and no other preference for power.
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wood & Mean 3.55 3.49 3.38 3.40 3.40
metal
Std. Deviation .932 .973 1.023 .947 .947
work
textile and Mean 3.42 3.35 3.31 3.15 3.15
garment Std. Deviation 1.048 1.158 1.114 1.031 1.031
food Mean 3.40 3.29 3.33 3.22 3.22
processing Std. Deviation 1.031 1.079 1.087 1.085 1.085
Mean 3.53 3.53 3.49 3.51 3.51
Service
Std. Deviation 1.062 1.062 1.114 1.041 1.041
Mean 3.49 3.44 3.40 3.36 3.36
Total
Std. Deviation 1.021 1.064 1.085 1.032 1.032
Market share of the enterprise was identified as mean score of 3.55 with standard deviation 0.932
for wood and metal work sector, Market share of the enterprise was identified as mean score of
3.42 with standard deviation 1.048 for textile and garment sector, Market share of the enterprise
was identified as mean score of 3.40 with standard deviation 1.031 for food processing sector,
Market share of the enterprise was identified as mean score of 3.53 with standard deviation 1.062
for service sector. Sales turnover of the enterprise was identified as mean score of 3.49 with
standard deviation 0.973 for wood and metal work sector, Sales turnover of the enterprise was
identified as mean score of 3.35 with standard deviation 1.158 for textile and garment sector, Sales
turnover of the enterprise was identified as mean score of 3.29 with standard deviation 1.079 for
food processing sector and Sales turnover of the enterprise was identified as mean score of 3.53
with standard deviation 1.062 for service sector etc From the table above it can be understood that
all the sectors agreed on their market share, sales turnover, profitability, customer satisfaction and
business expansions were moderately increased the business they are engaged in.
Mean, standard deviation, and ANOVA
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MSEs’ Performance 3.4644 0.98754
Source: - own survey, 2019
From the above table, data were summarized on the mean score and standard deviation of both
dependent and independent variables and also one-way ANOVA value. In general speaking, the
mean values of all variables in this study were ranged from 2.8337 to 3.9958. BDS dimensions
were under different categories; i.e. training and technical assistance (3.9958) have recorded high
score; technology & product development (3.4672) have recorded moderate score whereas market
access (3.1257), and input supply (2.8337) and infrastructure facility (3.2956) have recorded low
mean. The mean value of dependent variable (performance) was 4.644, which is moderate level.
It indicates, though business development services were delivered by micro and small enterprises
development office and technique colleges to enterprises, it did not able to support the business
based on its actual situation and makes the owner satisfied. Since BDS was not properly delivered
and score below average, the MSEs’ performance is compromised and then it was the part of
moderate level mean scores. Therefore, from this one can learn that having business development
service is not a guarantee for addressing well and make a difference with others who did not have
such services.
Analysis of variance (ANOVA) was employed to compare the means of three categorized sample
population. More specifically, since the study focused on the contribution of each independent
variable for dependent variable or compares the mean difference between three groups with one
factor and one outcome variable, one-way ANOVA was employed (Gaur and Gaur, 2009). The
study revealed that all explanatory variables were statistically significant at 1% (P < 0.01). It
implies there is evidence to safely accept the hypothesis “the performance of micro and small
manufacturing enterprise is not the same in all three categories (high, moderate, and low) of BDS
dimensions”. In other words, market access (F = 7.817, P = 0.00), infrastructure facility (F =
13.249, P = 0.00), input supply (F = 6.424, P = 0.00), training and technical assistance (F = 10.84,
P = 0.00), and technology and product development (F = 3.874, P = 0.00) were found to be
significant at 1% and confirmed that each group (enterprise) has different performance according
to their share of a given categorical factor or explanatory variable. Therefore, form this find one
can infer that, all BDS dimensions individually and jointly have positive and significant
relationship with the performance of micro and small manufacturing enterprises.
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Independent variables Performance
Technology and product development Pearson Correlation .400
Sig. (2-tailed) .000
N 236
Market access Pearson Correlation .486**
Sig. (2-tailed) .000
N 236
Input supply Pearson Correlation .510**
Sig. (2-tailed) .000
N 236
Training and technical support Pearson Correlation .629**
Sig. (2-tailed) .000
N 236
Infrastructure facilities Pearson Correlation .653**
Sig. (2-tailed) .000
N 236
**. Correlation is significant at the 0.01 level (2-tailed). Source: - field survey, 2019
As it is clearly indicated in the above table, a substantial positive relationship was found between
infrastructure facilities and performance (r =.653, p < .01), training and technical support (r = .629,
p < .01), which are statistically significant at 99% confidence level. This implies that at a 1% level
of significance it was discovered that the infrastructure facilities& training and technical support
plays a significant role in determining the performance of MSEs in the selected town.
Moreover, the table presents the association between the selected variables and performance of
MSEs for a sample of 236 operators in Debre Tabor town. There is medium, however statistically
significant relationship between input supply and performance (r = .510, p <.01). This would imply
that, the more input supply (up to the optimum) the better performance of MSEs would be. The
result on table above further indicates that, there is a medium positive correlation between market
access factors and business performance (r = .486), which is statistically significant at 99%
confidence level. This implies that MSEs with access to market performed considerably better.
There exists a positive relationship between technology and product development factors and
performance (r = .400, p < 0.01), which are statistically significant at 99% confidence level.
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Regression model analysis
The researcher conducted a regression analysis to explain the effect of various BDS factors
on the performance of businesses at Debre Town. The scores to be regressed were
computed through factor analysis (data reduction) and then saved as variables. Regression
analysis was conducted using Statistical Package for Social Sciences (SPSS).
Model Summary
ANOVA table
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a. Dependent Variable: Performance
b. Predictors: (Constant), infrastructure, technology and product
development, input, market access, training and technical support
The ANOVA table above shows that, as with any ANOVA the important information needed are the
degree of freedom, the F-value and the probability value and the ANOVA table reveals that the
overall variance accounted for in the moderate F-value (69.968) indicates that the predictor variables
(market Access, technology and product development, input supply, training and technical support
and infrastructure facility Services) are not controlling equally to MSEs performance. In addition,
Analysis of variance was also done to establish the significance of the regression model.
Coefficients
The result also showed, all five dimensions of BDS, which includes market access (β=0.117,
P=0.018), infrastructural facility (β=0.324, P=0.00), input supply (β=0.199, P=0.00), training and
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technical assistance (β=0.297, P=0.00), and technology and product development (β=0.115,
P=0.015), significantly and positively influence the performance of micro and small manufacturing
and service enterprises. In other words, all five dimensions of BDS were significant at 5% and
recognized as they are the vital determinants of micro and small manufacturing enterprise’s
performance. Furthermore, the most influential BDS dimension that affects MSE’s performance
was infrastructural facility with a coefficient of (0.324) followed by training and technical
assistance (β=0.365, P=0.00). It gives sense because, infrastructure with a good theoretical and
technical training are very crucial for the improvement of business performance. Therefore, the
regression result confirmed that all five hypotheses (H1 – H5) were accepted.
Hypothesis testing
Based on the standardized coefficient of beta and p-value, the hypothesis of the study were tested
and the result has been presented below
Hypothesis one
H1: Market access has a significant and positive effect on the performance of MSEs
The regression equation helps to predict dependent from the independent variable. In this simple
regression analysis, I try to address the effect of each independent variable or dimensions of BDS
on the dependent variable MSEs performance. The result of the Beta revealed that market access is
positive and significant predictor of MSEs performance at (β= 0.117, p<0.01). Therefore, the given
alternative hypothesis is accepted.
Hypothesis two
H2: Training and technical assistance has a significant and positive effect on the performance of
MSEs
In this simple regression analysis, the explanatory variable training and technical assistance
positively predicts the dependent variable with beta coefficient of 0.297 at significance level of
1%). Therefore, the given alternative hypothesis is accepted.
Hypothesis three
H3: Infrastructure facility has a significant and positive effect on the performance of MSEs Based
on the result on the above table, infrastructure facility has a beta coefficient of (β = 0.324, p<0.01).
So infrastructure facility has positive and significance factor on MSEs performance, thus, the given
alternative hypothesis is accepted.
Hypothesis four
H4: Input supply has a significant and positive effect on the performance of MSEs
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Based on the result input supply has a beta coefficient of (β = 0.19, p<0.01). So input supply has
positive and significance factor on MSEs performance, thus, the given alternative hypothesis is
accepted.
Hypothesis five
H5: Technology and product development has a significant and positive effect on the performance
of MSEs
The regression equation helps to predict dependent from the independent variable. In this simple
regression analysis, I try to address the effect of each independent variable or dimensions of BDS
on the dependent variable MSEs performance. The result of the Beta analysis revealed that
technology and product development is positive and significant predictor of MSEs performance at
(β= 0.115, p<0.05). Therefore, the given alternative hypothesis is accepted.
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it strongly affect the performance of micro and small enterprises with a coefficient of 0.386 with
beta coefficient of 0.217.
Technology and product development
Technology and product development as one category of business development service (BDS),
which designed to support micro, small, and medium enterprises. Thus, the study was
hypothesized that technology and product development has a significant and positive effect on the
micro and small manufacturing enterprises. As expected, the study revealed that technology and
product development support service has positive and statistically significant effect on micro and
small manufacturing enterprises (at 5%) with beta coefficient of 0.130.
Recommendations
It is necessary to solve this deep-rooted problem of MSEs. Some of the ways of doing so can be:
- Providing selling and display places in areas close to working area.
- Linking the MSEs with other operators is able to secure market opportunity.
- Changing the perception of the general public through extensive awareness creation mechanisms,
since private individuals are envisaged to be the main buyers of the products manufactured by
MSEs in the long run.
- solving problems related with power interruption and facilitating them loan service
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