QUANTITATIVE ANALSIS OF THE IMPACT OF SMALL AND MEDIUM SCALE ENTERPRISES ON THE GROWTH OF NIGERIAN ECONOMY: (1993-2011). (Review Completed - Accepted)
This study is on the quantitative impact of Small and medium scale enterprises (SMEs) on Nigeria’s economic growth performance for the sample period 1993 to 2011. The econometric technique adopted for the study was multiple regression method based on ordinary least squares technique. However, in order to avoid the incidence of spurious estimates, evidence from the ADF test conducted revealed that the variables are integrated of order two,1(2). The Johansen test conducted showed evidence of long run equilibrium relationship between small and medium scale enterprises and economic growth. However, in the mean time, output of SMEs (SMEO) does not make any significant contribution to Nigeria’s economic growth performance. The study concludes that poor government policies, on tariffs and incentives, bribery and corruption, non-existent entrepreneurial development centers and poor state of infrastructure act as impediments to the growth and development of SMEs in Nigeria. The recommendations are that governments at all levels should endeavor to establish Microfinance institutions for easy access to credit by SMEs, introduce financial literacy in schools, establish entrepreneurial development centers for capacity building, provide enough infrastructure, especially electricity and road net work, and finally establish agencies for control of bribery and corruption.
Stock markets provide channels for the mobilization and allocation of funds in the economy to be used by firms and others in fully exploiting their material, human and management resources for optimal output. The stock market itself can be influenced by macroeconomic factors prevalent in the economy. A co-integration and error correction model was employed on macroeconomic data from Nigeria and the results suggest that factors such as national savings rate, inflation rate, economic growth rates and financial intermediary development influenced stock market development during the period 1970-2011. Results from the Chow test suggested that there was no structural break in stock market development after the introduction of the Structural Adjustment Programme in 1986. It was recommended that stabilizing the financial and economic aggregates by the government for the overall growth of the economy will help to grow the stock market. JEL Classification: G20, G28, E44, O55