Exploring Factors Influencing Growth of MSMEs in Factor-Driven and Efficiency-Driven Economies

Abstract

The growth of micro, small, and medium-sized enterprises (MSMEs) is important as MSMEs constitute the main drivers of economic growth, particularly in the emerging economies of factor-driven and efficiency-driven economies. MSMEs represent an estimate of 90% of business organisations and more than half of job creation worldwide, and the growing global workforce means that growth of MSMEs are often a high priority for governments. However, despite attempts to support nurture and vitalise the growth of MSMEs, MSMEs located in emerging economies are often subjected to more hostile environments compared to their counterparts in developed economies, such as the lack of access to micro-finance and underdeveloped educational institutions. The lack of micro-finance is especially detrimental as MSMEs without creditworthy history could not apply for finance. This research synthesizes growth factors from literature in order to identify and examine the factors influencing growth of MSMEs in the emerging economies of factor-driven and efficiency-driven economies.