Micro and small industries have a significant and vital role in the economies of developed countries. Especially in developing countries small scale industries considered as a backbone of their economies. In regard of this, the study intends to examine the challenges and prospects of Micro and Small enterprises in construction sector, specifically on the construction material producer enterprises in Yeka and Bole sub-cities. To satisfy the objectives of this study, descriptive and inferential analyses were used. The information was collected from the sample of 150 MSEs with face to face interviews. The sampled MSEs were selected by simple random sampling technique. Besides that, the study draws out with nine key challenges which seem to influence the profitability of MSEs in both sub-cities. The results point to that, there is a strong relationship between the independent and dependent variable. Furthermore, the selected explanatory variables may significantly explain the variations of the explained variance at 5% and 10% level of significance. Based on the results, financial, managerial, raw material, work premises and technologies are the main challenges of MSEs, those to be profitable and successful. Therefore, recommendations are forwarded to government bodies, micro and small construction material producer enterprise and to other researchers.
Table of Contents
1.1 Introduction
1.2 Statement of the problem
1.3 Objective
1.3.1 General objective
1.3.2 Specific objective
1.3.3 Research question
1.4 Significance of study
1.5 Scope and Limitations of the study
1.5.1 Scope of the study
1.5.2 Limitations
1.6 Organization of the paper
2. Literature review
2.1 Theoretical reviews
2.1.1Definitions of Micro and small enterprises
2.1.2 Definitions of MSEs in Ethiopia
2.1.3 Improved definitions of MSE
2.1.4 Theoretical reviews on micro and small enterprises
2.1.5 The firm growth theory
2.1.6 The labor surplus theory
2.1.7 The output-demand theory
2.1.8 Micro and small enterprise in poverty reduction
2.2 Empirical reviews
2.3 Conceptual framework
3. RESEARCH METHODOLOGY
3.1 Research design
3.2 Sampling technique
3.2.1 Sample size
3.3 Description of variables
3.4 Specification of Econometric Model
3.5 Data nature and collection methods
3.6 Data processing and analysis
3.6.1 Data processing
3.6.2 Data analysis
3.7 Instrument development
3.7.1 Instrument Validity
3.7.2 Instrument Reliability
3.8 Ethical considerations
3.9 Study area profile
4. DATA PRESENTATION, ANALYSIS AND INTERPRETATION
4.1 Socio economic characteristics of the Enterprises
4.2 Descriptive statistics
4.3 Inferential analysis
5. CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusions
5.2 Recommendation
Research Objectives and Themes
The study aims to examine the challenges and prospects of micro and small construction material producer enterprises in Yeka and Bole sub-cities to understand the factors affecting their profitability, sustainability, and potential for growth within the sector.
- Identification of critical operational and financial challenges.
- Assessment of factors influencing enterprise profitability.
- Analysis of entrepreneur preferences regarding business continuity or shifting sectors.
- Evaluation of the support expectations from governmental bodies.
Excerpt from the Book
1.2 Statement of the problem
The Ethiopian government acknowledges the provision of micro and small enterprises and gives high attention to their promotion and development. To this result, the government establishes the National Micro and small enterprise agency in 2004/2005 G.C, which works by developing a systematic approach to alleviate the problems and promote the growth of MSEs that supported by policies, strategies and different incentive schemes (CSA, 2004 cited in woldegebriel, 2012). Within the last ten years more than 10,072 enterprises engaged in five growths oriented sectors in Yeka and Bole sub city. Even though the government tries to assist or support MSE in a different way, more than 270 enterprises leave or switch their business or they cannot sustain on their business due to lack of profitability. Currently 1,200 active construction material producer enterprises exist in both sub city( Yeka and Bole enterprise office).The sustainability of micro and small enterprises depend on profitability, but the above numerical figure shows that many micro and small construction enterprises couldn’t be successful or they encounter loss and gets different challenges to survive.
Rather the construction sector was highly growing up in Addis Ababa. The main reason for the rising of the construction sector is the global influence on spread out of infrastructure to fulfill the living standard of the society, to solve the serious housing problem of the citizens, reformation of the city and constructing power plants. As compared with the construction booming in the city, those enterprises would have more profitable but not.
Summary of Chapters
CHAPTER ONE: Introduces the construction sector in Ethiopia, outlines the study's core problems, and defines the research objectives and scope.
CHAPTER TWO: Provides a comprehensive literature review on the theories of micro and small enterprises, including firm growth and labor surplus models, and contextualizes these within the Ethiopian economic landscape.
CHAPTER THREE: Details the research methodology, including the sampling techniques, variables, and the econometric models (multiple linear regression and multinomial probit) utilized for data analysis.
CHAPTER FOUR: Presents the primary data collected from the 150 enterprises, interpreting the descriptive statistics and inferential results regarding the socio-economic factors and profitability.
CHAPTER FIVE: Concludes the findings regarding the major challenges of the sector and provides actionable recommendations for policy makers and business owners.
Keywords
Micro and small construction material enterprise, challenges, prospects, profitability, stay in business, shift to another, switch the business, Ethiopia, Yeka, Bole, economic growth, management, financial resources, infrastructure.
Frequently Asked Questions
What is the core focus of this thesis?
The thesis investigates the challenges and development prospects of micro and small enterprises (MSEs) specifically within the construction material production sector in the Yeka and Bole sub-cities of Addis Ababa.
What are the central thematic areas?
The research addresses financial access, managerial skills, availability of raw materials, work premises, and the overall impact of government policies on enterprise growth and sustainability.
What is the primary objective of the study?
The primary goal is to analyze the factors that influence the profitability of these MSEs and identify why some survive while others choose to shift or switch their business activities.
Which research methodology was applied?
The study employed a descriptive and explanatory research design, utilizing quantitative primary data collected via face-to-face interviews with 150 sampled MSE operators, and applying STATA for statistical analysis.
What does the main body of the work cover?
The main body covers a theoretical review of MSE definitions, firm growth theories, an empirical assessment of existing challenges, and a robust econometric analysis of profitability determinants.
Which keywords best characterize this research?
Key terms include micro and small construction material enterprise, profitability, business sustainability, Yeka and Bole sub-cities, and policy support mechanisms.
How did the study measure profitability?
Profitability was analyzed using multiple linear regression models, examining the impact of variables such as capital, management skill, market linkage, and age of the manager.
What is the significance of the "multinomial probit model" used in the study?
This model was used to predict the prospects of firms—specifically their tendency to stay in business, shift to another sector, or switch/leave the business entirely based on various challenges.
What key conclusion does the author reach regarding government support?
The author concludes that while government support exists, there is a clear need for improved market linkage, simplified loan procedures, and better access to work premises to ensure the survival and success of these enterprises.
- Citar trabajo
- Matiyas Derbie (Autor), 2017, Challenges and Prospects of Micro and Small Construction Material Producer Enerprises in Yeka and Bole Sub City, Múnich, GRIN Verlag, https://www.grin.com/document/412722
