ENVIRONMENTAL FACTORS AND SMES’ PERFORMANCE IN OGUN STATE, NIGERIA

Abstract

The effect of environmental factors has engendered a lot of debate in the existing literature. This study examines the effect of environmental factors on SMEs performance in Ogun State, Nigeria. The study is premised on the dimensions of environmental factors, which are employees, shareholders, government support and competitive pressure. Survey research design, comprising of 218 business owners in Ijebu Ode and Ago-Iwoye, Ogun State, Nigeria was employed. The F-statistics (Fc = 32.931; P = 0.000) shows that environmental factors are strong determinants of SMEs performance. The findings further revealed that shareholders (Tc = 3.041; P < 0.05) and competitive pressure (Tc = -2.753; P < 0.05) are the critical factors determining SMEs performance in Ogun State, Nigeria while employees and government support are also significantly related to the performance of SMEs. Hence, business owners should pay more attention to the environment factors as well as competitive pressure and shareholders since these are the most critical measures of the environmental factors determining the performance of SMEs in Ogun State, Nigeria.