The Role of Small and Medium Enterprises (SMEs) in Employment Generation and Economic Growth: A Study of Marble Industry in Emerging Economy

Lara Al-Haddad, Muhammad Safdar Sial, Imdad Ali, Rahmat Alam, Nguyen Vinh Khuong and Thai Hong Thuy Khanh

International Journal of Financial Research, 2019, vol. 10, issue 6, 174-187

Abstract: This study is undertaken to find out how SMEs contribute to the economy in terms of employment generation and its impact on the economic growth of the country. Small and Medium Scale Enterprises (SMEs) is accepted globally as a tool for empowering the citizenry and economic growth. In Pakistan efforts have been made by successive governments to increase employment opportunities, reduce poverty and accelerate economic growth by increasing foreign direct investment, diversifying the economy, enacting policy frameworks which favor small business ownership and entrepreneurship programs. Specifically, this study tends to figure out: how SMEs contribute to employment generation, whether a significant number of people is employ within the SME sector; whether the SMEs increase the income level of people. The total number of employees was 255 being selected randomly from Swat marble industries. A questionnaire was constructed and distributed to the selected respondents. The responses were collected and analyzed using the Statistical Package for Social Sciences (SPSS) analytical tool. The study exposes that SMEs play a vital role in employment generation. There is a positive relationship between SMEs and unemployment reduction. The result also shows that there is a positive relationship between SMEs and increase in income level. This study may be beneficial both for practitioners and academicians. For practitioners, the current study may help to devise policies and strategies concerning SMEs to generate employment opportunities. The current study may lead to the generalizability of existing research in the same field as for academic aspect is a concern.

Keywords: small and medium enterprises (SMEs); unemployment reduction; economic growth (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:10:y:2019:i:6:p:174-187

DOI: 10.5430/ijfr.v10n6p174

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