Elevating SMEs Performance through Entrepreneurial Innovation and Government Regulations in Bujumbura, Burundi

Stephen Makau Muathe, Eunice Dushime and Lucy Kavindah
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Stephen Makau Muathe: School Business, Economics and Tourism, Kenyatta University, Kenya
Eunice Dushime: School Business, Economics and Tourism, Kenyatta University, Kenya
Lucy Kavindah: School Business, Economics and Tourism, Kenyatta University, Kenya

International Journal of Research and Innovation in Social Science, 2023, vol. 7, issue 5, 194-208

Abstract: In most developing countries including Burundi Small and Medium Enterprises are major players in growth of the economies. In Burundi they accelerate growth towards achieving Burundi’s vision 2025 by offering job opportunities, generating revenue for the government, reducing poverty and income inequality. However, they experience poor performance as indicated by reduced revenue turnover by 44.6 percent in 2014 to 2018. The focus of this study was to investigate the moderating effect of government regulation on the relationship between entrepreneurial innovation and the performance of small and medium enterprises in Bujumbura, Burundi. Resource-based view and dynamic capability theory guided the study, this was supported by Schumpeter’s theory of entrepreneurship and innovation. An explanatory research design was used to test the causal effect of the study variables. A sample size of 164 SMEs was selected from the target population of 279 SMEs in Bujumbura, data was analysed using multiple linear regression. The study found out that government regulations negatively and significantly moderate the relationship between entrepreneurial innovation and performance. Thus, the Government through the ministry of industry and trade of Burundi should create a good environment for SMEs to thrive by lowering license costs and the time taken to issue a license in order to create a better business climate for SMEs to flourish.

Date: 2023
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