The impact of trade facilitation on African SMEs’ performance
The impact of trade facilitation on African SMEs’ performance
Whilst contemporary literature indicates that the business environment (BE) impacts almost all entrepreneurial activities, there are indications that
the unique business and institutional setting in Africa (with its challenges and opportunities) and the nature of SMEs (their strengths and weaknesses), among other factors, lead to the context-specific impact of regulations on the performance of African SMEs. Using regressions and propensity score matching methods on a panel of 39,461 firm observations (27 African countries) from the World Bank Enterprise Surveys, we unearthed evidence to suggest that whilst enabling tax administration and business licensing regulations improve SMEs’ performance, trade facilitation impedes African SMEs’ performance. Furthermore, the institutional context of competition (from foreign firms) worsens trade facilitation’s negative impact on African SMEs’ performance. These findings suggest a fine-tuning of BE regulations in African countries. Trade facilitation, for example, must be carefully thought through and implemented in a way to benefit SMEs.
Africa, Business Environment, Institutional heterogeneity, Performance, Regulations, SMEs
105-131
Hansen‑Addy, Andrew E.
7c60a8a8-639d-4de6-8059-c7e0da1dd961
Tingbani, Ishmael
e6b2741a-d792-4adf-84cc-a2f64d5545ca
January 2024
Hansen‑Addy, Andrew E.
7c60a8a8-639d-4de6-8059-c7e0da1dd961
Tingbani, Ishmael
e6b2741a-d792-4adf-84cc-a2f64d5545ca
Hansen‑Addy, Andrew E. and Tingbani, Ishmael
,
Davide M. Parrilli
(2024)
The impact of trade facilitation on African SMEs’ performance.
Small Business Economics, 62 (1), .
(doi:10.1007/s11187-023-00756-4).
Abstract
Whilst contemporary literature indicates that the business environment (BE) impacts almost all entrepreneurial activities, there are indications that
the unique business and institutional setting in Africa (with its challenges and opportunities) and the nature of SMEs (their strengths and weaknesses), among other factors, lead to the context-specific impact of regulations on the performance of African SMEs. Using regressions and propensity score matching methods on a panel of 39,461 firm observations (27 African countries) from the World Bank Enterprise Surveys, we unearthed evidence to suggest that whilst enabling tax administration and business licensing regulations improve SMEs’ performance, trade facilitation impedes African SMEs’ performance. Furthermore, the institutional context of competition (from foreign firms) worsens trade facilitation’s negative impact on African SMEs’ performance. These findings suggest a fine-tuning of BE regulations in African countries. Trade facilitation, for example, must be carefully thought through and implemented in a way to benefit SMEs.
Text
s11187-023-00756-4
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Accepted/In Press date: 15 March 2023
Published date: January 2024
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Publisher Copyright:
© 2023, The Author(s).
Keywords:
Africa, Business Environment, Institutional heterogeneity, Performance, Regulations, SMEs
Identifiers
Local EPrints ID: 476647
URI: http://eprints.soton.ac.uk/id/eprint/476647
ISSN: 0921-898X
PURE UUID: 34b2dd1e-6ae4-43ea-b45d-69f39ba5717b
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Date deposited: 10 May 2023 17:07
Last modified: 17 Mar 2024 04:02
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Author:
Andrew E. Hansen‑Addy
Corporate Author: Davide M. Parrilli
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