Research Publications (Management Sciences)
Permanent URI for this collectionhttp://ir-dev.dut.ac.za/handle/10321/217
Browse
Search Results
Item The role of business incubation programmes on the performance of small and medium enterprises in South Africa(2023-05-15) Zhou, Helper; Zondo, Robert Walter DumisaniResearch has shown that Small and Medium Enterprise (SMEs) play a pivotal role in socio-economic development of countries across the globe. In recent years, business incubation programmes have gained popularity to address the perennial challenge of SME failure in South Africa. However, there have been very limited studies to empirically assess the impact of incubation in South Africa. To address this gap, this study utilised dataset, comprising 387 incubated and non-incubated firms to assess the impact of business incubation of performance. The originality of our study lies in valuable insights we established relating to the impact of incubators on SME performance. Utilising Generalised Least Squares technique in R, the study revealed that incubation has a positive impact on SME performance. Further to that the results revealed differing attributes between the incubated and non-incubated cohorts. It was recommended that the government should invest into incubation programmes to drive sustainable SME performance. Further to that, the heterogeneity between the two cohorts demands a shift from a “one size fits all” approach to supporting SMEs in South AfricaItem Do firms’ growth rates follow a random walk? evidence from incubated small and medium enterprises in South Africa(Durban University of Technology, 2023) Zhou, Helper; Zondo, Robert Walter DumisaniDebate on the validity of the Law of Proportionate Effect (LPE) on firm growth is ongoing decades after it was postulated by Gibrat in 1931. The theoretical model which asserts that firm growth follows a random walk has been largely tested in developed economies using data from non-incubated firms, with scanty research in developing regions like Africa. This paper, therefore, aims to address this gap by being the first to assess the validity of Gibrat's law on incubated small, medium, and micro enterprises (SMMEs) in South Africa. The study utilised four-year panel data from 300 incubated SMMEs across the country, for the period between 2018 to 2021. Utilising the Law's generalised growth rate model, the generalised least square regression modelling was harnessed, using R Software. The findings, using sales as firm size proxy, confirmed Gibrat’s Law. The results showed that firm size had no effect on the sales growth rate of incubated firms, on the other hand when employment proxied performance the LPE was rejected. The findings provide important implications for both practitioners and pertinent stakeholders in the SMME sector in South Africa.