Determinants of SMMEs growth in post-war communities in developing countries: Testing the interaction effect of government support

Abstract

Purpose

The purpose of this paper is to test the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and small, medium, and micro enterprises (SMMEs) survival in post-war communities in Northern Uganda.

Design/methodology/approach

Cross-sectional research design was used in the study and quantitative data were collected from 304 SMMEs located in Gulu District using a semi-structured questionnaire. Structural equation modeling (SEM) through the use of analysis of moment structures was adopted to establish the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and SMMEs survival in post-war communities in Northern Uganda. Furthermore, Pearson’s correlation analysis was used to show the association between the variables under study.

Findings

The results revealed that there is a significant interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and SMMEs survival in post-war communities in Northern Uganda. Besides, the results indicated that business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and government support have significant and positive impacts on SMMEs survival in post-war communities in Northern Uganda.

Research limitations/implications

The study employed cross-sectional research design, thus, ignoring longitudinal study approach. Besides, the sample was selected from only Gulu District, therefore, leaving out other Districts located in Northern Uganda.

Practical implications

Advocates of recovery programs and interventions in developing countries should consider government support as a vital factor in promoting business skill, capital adequacy, access to finance, access to market, and entrepreneurial education in order to enhance SMMEs growth in post-war communities. In addition, governments in developing countries should offer investment incentives and tax waivers to infant SMMEs in post-war communities like in Northern Uganda.

Originality/value

The study examined the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and SMMEs survival in post-war communities in developing countries. Thus, to the best of the authors’ knowledge, this is the first attempt to test the interaction effect of government support in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and SMMEs survival in post-war communities in Northern Uganda. The use of government support as a moderator in the relationship between business skills, capital adequacy, access to finance, access to market, entrepreneurial education, and SMMEs survival is scarce in entrepreneurship literature and theory. This creates uniqueness in this study.

Citation

Candiya Bongomin, G.O., Munene, J.C., Ntayi, J.M. and Malinga, C.A. (2018), "Determinants of SMMEs growth in post-war communities in developing countries: Testing the interaction effect of government support", World Journal of Entrepreneurship, Management and Sustainable Development, Vol. 14 No. 1, pp. 50-73. https://doi.org/10.1108/WJEMSD-06-2017-0026