Performance of microenterprises in Ghana: a resource-based view

Author： Masakure Oliver Henson Spencer Cranfield John

ISSN： 1462-6004

Source： Journal of Small Business and Enterprise Development, Vol.16, Iss.3, 2009-08, pp. : 466-484

Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.

Previous Menu Next

Abstract

Purpose ‐ The purpose of this paper is to assess the financial performance of microenterprises in Ghana by applying the resource-based theory of the firm. Specifically, it is tested that if firm-specific resources dominate sector and market-wide effects in explaining microenterprise performance, as suggested by the resource-based theory. Design/methodology/approach ‐ The relevant literature for both microenterprise performance and the resource-based theory is reviewed. Data from the 1998/1999 Ghana Living Standards Survey are analysed using ordinary least squares, followed by robustness checks. Findings ‐ Factors embodied in firm-specific resources jointly impact enterprise performance. However, sector/market factors also play a role, suggesting that the interaction between microenterprise, sector, and market factors helps explain enterprise performance. Research limitations/implications ‐ All the constructs of the resource-based theory cannot be tested due to data limitations. Originality/value ‐ Small enterprises play a key role in promoting developing country growth, but no study has evaluated microenterprise performance using this particular data set and the resource-based theory of the firm. Future research should focus on collecting data to further validate this theory.