EFFECTS OF MACRO BUSINESS ENVIRONMENT ON ENTREPRENEURIAL PERFORMANCE: A STUDY OF SMEs IN SOUTH -EAST NIGERIA

Abstract

This study evaluated the effects of some macro business environmental components on the performance of small and medium (SME) enterprises in Nigeria's southeast geopolitical zone. It focuses on inflation and three indices of entrepreneurial performance, namely productivity, profitability and asset growth, to determine whether inflation affects small and medium scale firms in South East Nigeria. Three objectives were established to lead the research. Three research questions and three hypotheses were derived from the three aims of the study. The questionnaire instrument was the primary source of data for the study. A sample of 400 small and medium-scale businesses in South East Nigeria were chosen. The generated data was presented and analysed descriptively using simple frequencies, percentages and means. Two of the three hypotheses were rejected using the regression analysis technique. The correlation coefficient analysis for non-parametric data at the 5% level of significance revealed the degree of correlation between the variables. As a result, the study indicated that political insecurity impacts the entrepreneurial performance of small and medium-scale businesses in South East Nigeria. The study thus suggested, among others, that business owners should acknowledge that the success or failure of their enterprises depend on the external business environment and as a result, update their knowledge, understanding and skills to keep up with the changes that are expected to occur in their industry. In addition, government should minimize frequent changes in their policies and guarantee the stability of democratic institutions and political integration.