What Makes Firms Perform Well? Evidence from Ghana Retail Shops

Abstract

Small and Medium Enterprises are an integral part of the modern world. In today’s intensively competitive business environment, the retail industry will be more important for developing economies because of the rising unemployment rate. The growth of the retail shops, however, is hindered to a large extent of challenges. Observing the growth of the retail industry in Ghana recently, one can conclude that the sector is significantly developing with numerous challenges surrounding it. Hence the question, what makes small firms perform well needs to be addressed properly, particularly in the case of retail shops in Ghana. The data used in this study was collected by distributing questionnaires to retail shop owners. 348 out of 423 questionnaires were answered and returned successfully. The study then employed OLS, logit, and probit regression models to analyze the impact of numerous factors that influence the growth of retail shops. The study revealed that factors such as training, access to market, business experience of retail shops owners, and access to transportation are positively associated with the growth of retail shops whereas factors like gender, age, education, start-up capital, access to credit, and social network are negatively associated with the growth of retail shops. Based on the findings, this study recommends that the government of Ghana should pay much attention to the sector by providing training to retail shop owners and their employees in order to have access to the necessary entrepreneurship training that will equip them to manage the affairs of their business which will at long-run influence economic growth.