Assessment of Barriers to Small and Medium Enterprises from Engaging in Export Business in Case of Mekelle City, Ethiopia

Abstract

The overriding purpose of this study was to assess the barriers that hinder small and medium enterprises (SMEs) from engaging in export business in the case Mekelle city Ethiopia. The study employed both descriptive and explanatory research design. 252 SMEs were taken as total population, from these 155 sample respondents were selected from three types of business by using a proportionate stratified random sampling technique. To collect relevant data, this study used both questionnaires and interviews; then, data collected through questionnaires analyzed using descriptive and inferential statistics and presented through tables and figures. Hypotheses were developed and tested. To examine the relationship between the dependent and independent variables multiple regression employed and analyzed with the help of SPSS version 16. Multiple regression results revealed that the independent variables i.e. financial, informational, marketing, functional, procedural, and governmental barriers explain 50.3% of the dependent variable i.e. export business engagement. Moreover, the independent variables such as financial, marketing, functional, procedural, and governmental barriers founded to be significant barriers impeding SMEs from engaging in export business. However informational related barrier was founded to be an insignificant barrier. Finally, to overcome the identified barriers, the researcher recommended both the runners of SMEs and the government bodies. Greater efforts is required from runners to get adequate finance, government bodies should provide assistance to SMEs through continuously monitoring the environment, strengthening lending institutions, and formulating appropriate policies that encourage small business get involved in export business.

Keywords: external barriers, export business, internal barriers, Mekelle, SMEs

DOI: 10.7176/JESD/11-18-02

Publication date:September 30^th 2020