Effects of Business Environment on the Performance of SMEs

Studies have shown that environments in which business enterprises operate influence their performance. Therefore, the author considers it necessary to establish effects of the environment on SMEs so as to contribute to existing studies, most of which had been subsector-specific and based on few environmental factors. The findings are intended to enhance environment-enterprise policy mechanisms and regulatory frameworks at local, state and national levels as well as industry and management practices. In so doing, the author employed survey and exploratory research designs to generate relevant data. The author developed and used Multifactor Business Environment Questionnaire (MBEQ), whose validity and reliability were appropriately established, as data generation instrument. Based on World Bank’s specification for sample size determination, as well as standard definitional criteria, the author addressed relevant questions from the propositions of no significant effects. The author made interesting findings that are relevant for environment-business related policies, especially the small and medium enterprises.