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Impact of Government Support, Business Style, and Entrepreneurial Sustainability on Business Location of SMEs in South Africa’s Mpumalanga Province

Author

Listed:
  • Kanayo K. Ogujiuba

    (School of Development Studies, University of Mpumalanga, Nelspruit 1200, South Africa)

  • Ebenezer Olamide

    (School of Development Studies, University of Mpumalanga, Nelspruit 1200, South Africa)

  • Azikiwe Isaac Agholor

    (School of Agriculture, University of Mpumalanga, Nelspruit 1200, South Africa)

  • Estelle Boshoff

    (School of Development Studies, University of Mpumalanga, Nelspruit 1200, South Africa)

  • Phetole Semosa

    (School of Development Studies, University of Mpumalanga, Nelspruit 1200, South Africa)

Abstract

Finance, incubation, managerial support initiatives, and technological innovation have all been identified as major drivers of SMEs’ business location. Despite the importance of SMEs, little attention has been paid to business research regarding the impact of government support, business style, and entrepreneurial sustainability on SME activities in rural, semi-urban, and urban areas. Identifying the necessary support for SMEs in rural, semi-urban, and urban areas is critical for the government as well as stakeholders and SME owners in assessing their survival status and other goal-setting achievements. The article’s central question is whether government support, business style, and entrepreneurship sustainability affect SME operations differently depending on location (rural, semi-urban, or urban). The MANOVA technique was used for the analysis to determine whether there is a significant difference between groups on a composite dependent variable as well as the univariate results for each dependent variable separately. Because conducting a series of studies (ANOVA) reveals the possibility of an inflated Type 1 error, MANOVA is preferred. The test re-test reliability method (trustworthiness assessment of the questionnaire) and the Cronbach Alpha test (internal consistency of instrument sections) yielded satisfactory results of 0.70 and 0.875, respectively. Government support (GS), business style (BS), and entrepreneurial sustainability were used as dependent variables (SE). The independent variable was the business location. On the combined dependent variables, there was a statistically significant difference between SME location: F (3, 902) = 20.388, p = 0.001, Wilks’ Lambda = 0.88, partial eta squared = 0.06. When the results for the dependent variables were considered separately, they all reached statistical significance, using a Bonferroni adjusted alpha level of 0.017. BS: F (1, 904) = 13.29, p ≤ 001, partial eta squared = 0.03. GS: F (1, 904) = 30.28, p ≤ 0.001, partial eta squared = 0.06. SE: F (1, 904) = 8.08, p ≤ 0.001, partial eta squared = 0.02. The findings show that locational effects on government support have a knock-on effect on the business plan and long-term entrepreneurship. As a result, the government must reconsider its rural activities to ensure that support is distributed equitably across levels of location.

Suggested Citation

  • Kanayo K. Ogujiuba & Ebenezer Olamide & Azikiwe Isaac Agholor & Estelle Boshoff & Phetole Semosa, 2022. "Impact of Government Support, Business Style, and Entrepreneurial Sustainability on Business Location of SMEs in South Africa’s Mpumalanga Province," Administrative Sciences, MDPI, vol. 12(3), pages 1-19, September.
    • Handle: RePEc:gam:jadmsc:v:12:y:2022:i:3:p:117-:d:914708
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    References listed on IDEAS

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    1. Olawale Fatoki, 2018. "The Impact of Entrepreneurial Resilience on the Success of Small and Medium Enterprises in South Africa," Sustainability, MDPI, vol. 10(7), pages 1-12, July.
    2. Samuel Afriyie & Jianguo Du & Abdul-Aziz Musah, 2019. "Innovation and marketing performance of SME in an emerging economy: the moderating effect of transformational leadership," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-25, December.
    3. Cravo, Tulio & Piza, Caio, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low -and Middle- Income Countries: A Meta-Analysis," IDB Publications (Working Papers) 7745, Inter-American Development Bank.
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    1. Kanayo K. Ogujiuba & Maria Eggink & Ebenezer Olamide, 2023. "Impact of Elements of Finance and Business Support on the SME Business Ecosystem in South Africa: An Econometric Analysis," Sustainability, MDPI, vol. 15(11), pages 1-19, May.

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