International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue VII, July 2019 | ISSN 2321–2705

Determinants of Sustainable Performance of SMEs: A Proposed Framework

Amina Asabe Adamu, Chong Yen Wan, Abdullahi Hassan Gorondutse

School of Business Management, Universiti Utara Malaysia

Abstract: – Small and Medium Enterprises (SMEs) play a vital role in the sustainable development of a nation. They are the core of an economic system as they provide employment and contribute to GDP. The need for their sustainable performance is therefore important. This paper presents a conceptual framework aimed at investigating the factors that influence the sustainable performance of SMEs. Though, the number of researches that focused on SMEs seem to increase, previous literature reveals there is a dearth of studies exploring the factors that influence SMEs performance from sustainability perspectives, whether conceptual or empirical. Moreover, the findings of the few studies in this area were inconsistent. The study identifies five factors that are necessary and applicable to the sustainable performance of SMEs. The five factors are ethical sensitivity, knowledge sharing intensity, access to ICT, access to finance, and innovativeness. The study suggests an empirical investigation to test the moderating effect of innovativeness on the relationship between ethical sensitivity, knowledge sharing intensity, access to ICT, access to finance, and sustainable performance of SMEs.

Keywords: SMEs, Innovativeness, Sustainable Performance.

I. INTRODUCTION

Small and Medium Enterprises (SME) have continued to gain more importance for their role in global economies. The significance of SMEs is hinged to their contribution to economic growth and development by helping to reduce poverty and the provision of employment in their respective nations. They play an important role in the supply chain of key industries, contribution to export earnings, value addition to per capita-income and GDP to both developed and developing economies.
More importantly, in developing countries such as Nigeria, the SMEs have been recognized as oneof the effective means of eradicating poverty in these countries. For instance,SMEs contribute greatly to the employment generation as well as economic development in the country. The contribution of SMEs to employment generation in Nigeria was 25% and 46.54% to GDP in 2016 (SMEDAN, 2017).