Determinants of Micro and Small Manufacturing Enterprises Growth A Case Study in Selected Towns of Central Administrative Zone, Tigray Regional State

Abstract

This study was conducted with the objective of identifying and analyzing the factors that
influence growth of MSEs operating in the manufacturing sector. Primary data were collected
from 226 randomly selected owner/operator of manufacturing MSEs and coordinators of MSEs
by using close ended questionnaire and interview, respectively. A binary logit regression model
was used to analyze the owner related/internal factors, and external factors that influence
growth of manufacturing MSEs. A total of ten explanatory variables were included in the
regression. Out of these, seven variables were found to significantly affect growth of
manufacturing MSEs. The binary logistic regression result showed that among the variables
hypothesized to affect MSEs growth, age of owner/operator, gender, work premises, technical
and business training, access to infrastructure, market linkage and location have statistically
significant effect on growth of manufacturing MSEs. Therefore, to improve the growth of
manufacturing MSEs, MSEs development office in collaboration with the municipality should
strive for the MSEs to have own working premise or construct shades and avail them at fair rent,
devote more in working with technical and vocational education training colleges to solve skill
gaps of entrepreneurs and the regional government should pay attention to the improvement of
infrastructures.