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Effects of Government Intervention on SMMEs: A Review of Empirical Evidence

Author

Listed:
  • Timothy Alukom

    (University of South Africa)

  • Innocent Bayai

    (University of South Africa)

  • Prince Enwereji

    (University of South Africa)

Abstract

Over the past two decades, governments around the globe have been providing financial and non-financial resources to support small, micro and medium-sized enterprises (SMMEs) through grants and subsidies. But do these public investments help SMMEs to improve their performance and growth in terms of job creation, productivity, sales and their ability to survive? The analysis, which focused on government subsidies and grant programmes, provides an answer to this question through a review of evidence on the effects of public intervention over the period 2010 to 2022. Results indicate that government intervention programmes have had an overall favourable impact on business employment creation, sales/turnover and productivity, while there are conflicting results for business labour productivity and business survival. Despite the divergent empirical results across programmes, it is imperative that government intervention programmes address inclusiveness in the design and implementation phase of grants and subsidies programmes in order to link programme objectives with the intended outcome.

Suggested Citation

  • Timothy Alukom & Innocent Bayai & Prince Enwereji, 2023. "Effects of Government Intervention on SMMEs: A Review of Empirical Evidence," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 19(5), pages 264-289, October.
    • Handle: RePEc:dug:actaec:y:2023:i:5:p:264-289
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