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Examining the Effect of Corruption and Bureaucracy on SMEs Growth in the Kumasi Metropolis of Ghana

  • Small and Medium Enterprises (SMEs) are considered a seed-bed of entrepreneurship and innovation in most emerging economies; nevertheless, SMEs sometimes lack an enabling business climate, which hinders their potential growth. This paper examines the effect of corruption and bureaucracy on SMEs growth in the Kumasi Metropolis of Ghana. The study was a quantitative research, and convenience sampling method was employed to select 373 owners/managers as respondents for the study. Employing questionnaire as its main data collection instrument, the study used Gretl version 3.0 Statistical Software for the analysis of data collected. The results of the study revealed that 1% increase in corruption in the SMEs sector leads to 36.12% decline in SMEs growth (sales and employment), and 1% increase in bureaucracy leads to 28.76% decrease in the growth of SMEs. An interesting outcome of the study was that the excessive bureaucratic bottlenecks in the SMEs sector are implied by corruption. We, therefore, conclude that there is a significant negative relationship between corruption and bureaucracy and SMEs growth. It is, therefore, recommended that the government takes a giant-step to fight corruption in the SMEs sector by ensuring transparency and accountability of public officials and also streamline its systems and activities in the sector to reduce the excessive administrative barriers. The present study adds substantial value to the body of research on SMEs as it is the first research to have considered the joint effect of corruption and bureaucracy on SMEs growth in an emerging economy like Ghana.

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Document Type:Conference Object
Author:Kwamena Minta Nyarku, Stephen Oduro
Parent Title (English):Munyoki, Bode (Eds.): Universities, Entrepreneurship and Enterprise Development in Africa - Conference Proceedings 2017. Nairobi, Kenya, 19. July 2017
First Page:154
Last Page:173
Publishing Institution:Hochschule Bonn-Rhein-Sieg
Date of first publication:2017/11/28
Dewey Decimal Classification (DDC):6 Technik, Medizin, angewandte Wissenschaften / 65 Management, Öffentlichkeitsarbeit / 650 Management und unterstützende Tätigkeiten
Conferences:Universities, Entrepreneurship and Enterprise Development in Africa / Universities, Entrepreneurship and Enterprise Development in Africa, Nairobi, Kenya, 19 July 2017
Entry in this database:2017/11/28
Licence (Multiple languages):License LogoIn Copyright (Urheberrechtsschutz)