The impact of trade facilitation on African SMEs’ performance

Andrew E. Hansen-Addy (), Davide M. Parrilli () and Ishmael Tingbani ()
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Andrew E. Hansen-Addy: University of Greenwich, Old Naval College
Davide M. Parrilli: Bournemouth University
Ishmael Tingbani: University of Southampton, University Road

Small Business Economics, 2024, vol. 62, issue 1, No 5, 105-131

Abstract: Abstract Whilst contemporary literature indicates that the business environment (BE) impacts almost all entrepreneurial activities, there are indications that the unique business and institutional setting in Africa (with its challenges and opportunities) and the nature of SMEs (their strengths and weaknesses), among other factors, lead to the context-specific impact of regulations on the performance of African SMEs. Using regressions and propensity score matching methods on a panel of 39,461 firm observations (27 African countries) from the World Bank Enterprise Surveys, we unearthed evidence to suggest that whilst enabling tax administration and business licensing regulations improve SMEs’ performance, trade facilitation impedes African SMEs’ performance. Furthermore, the institutional context of competition (from foreign firms) worsens trade facilitation’s negative impact on African SMEs’ performance. These findings suggest a fine-tuning of BE regulations in African countries. Trade facilitation, for example, must be carefully thought through and implemented in a way to benefit SMEs.

Keywords: SMEs; Business Environment; Regulations; Institutional heterogeneity; Performance; Africa (search for similar items in EconPapers)
JEL-codes: L25 L26 O17 O24 O55 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11187-023-00756-4

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