A cross-country analysis of small and medium-sized enterprise owners' perspectives of factors affecting business performance: a case of South Africa and China

Abstract

Small and medium-sized enterprises (SMEs) are a key driver of global economic growth, which implies that they are critical to national economic growth. As a result, they are priorities in most governments' development agendas. Thus, it is critical for SME owners and managers to be aware of the factors influencing their companies' performance and to be able to act when necessary. Although scholars have conducted research on SME performance and growth factors for more than two decades, we still have a limited understanding of this type of research. This cross-sectional quantitative exploratory study examined SME owner-managers perspectives on factors influencing SME performance in South Africa and China. The Tshwane University of Technology provided secondary data for the study. The dataset included 401 participants, of whom approximately 66% (266) were South African and 34% (135) Chinese. Proportions and count were used to summarize all categorical information, and Pearson's chi-square test was used to test for association between each pair of categorical variables. Pearson's chi-squared test, with a 0.05 error rate, revealed that the factors d4 (contribution of networking towards SME success), d5 (quality services and products determine entrepreneur success), e8 (high rental costs), and f7 (innovation and creativity) were insignificantly associated with the country (South Africa and China). Otherwise, participants in the two countries had very different perspectives on the latent constructs under investigation. In other words, the study reported that the Chinese and South African SME owners had different perceptions of the factors that influenced SME performance or success. The exception was observed in terms of innovation and creativity, where they perceived this aspect to be important in overcoming SMEs' challenges. The study concluded that SME performance and, as a result, SME growth rate, may be influenced by managerial traits, internal factors, and external factors. If visual analogue scale data had been used instead of Likert-scale data, either the same or different results would have been obtained. Furthermore, the results of the study that employed multivariate data analysis would be more trustworthy because the model would have considered a large number of covariates.