FACTORS THAT DETERMINE THE PERFORMANCE OF MICRO AND SMALL ENTERPRISES IN ETHIOPIA WITH PARTICULAR REFERENCE TO AMHARA REGION MICRO AND SMALL ENTERPRISES

Abstract

Micro and Small enterprises (MSEs) play a key role in economic growth and industrial development of a country. They make vital contributions in improving economic and social sectors of a country through stimulating large scale employment, investment, development of indigenous skill and technology, promotion of entrepreneurship and innovativeness, enhancing exports, and also building an industrial base at different scales. However, Ethiopian micro- and small enterprises (MSEs) still perform poorly as a result of a combination of factors ranging from internal to external factors.  The study aims to investigate the growth determinants of MSEs based on a survey covering 45 randomly selected MSEs from Amhara  regional state of Ethiopia through the test of three main hypotheses that are formulated concerning owner characteristics, firm characteristics  and business environments ( external factors) as a main determinants of growth of an enterprise. Questionnaires were used to collect data. The finding shows that there is a significant relationship between growth of MSEs and owner characteristics, firm characteristics and business environments.