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 thatinfluence growth of MSEs operating in the manufacturing sector. Primary data were collectedfrom 226 randomly selected owner/operator of manufacturing MSEs and coordinators of MSEsby using close ended questionnaire and interview, respectively. A binary logit regression modelwas used to analyze the owner related/internal factors, and external factors that influencegrowth of manufacturing MSEs. A total of ten explanatory variables were included in theregression. Out of these, seven variables were found to significantly affect growth ofmanufacturing MSEs. The binary logistic regression result showed that among the variableshypothesized to affect MSEs growth, age of owner/operator, gender, work premises, technicaland business training, access to infrastructure, market linkage and location have statisticallysignificant effect on growth of manufacturing MSEs. Therefore, to improve the growth ofmanufacturing MSEs, MSEs development office in collaboration with the municipality shouldstrive 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 skillgaps of entrepreneurs and the regional government should pay attention to the improvement ofinfrastructures.