Does listing on the JSE’S Altx improve the performance of small and medium-sized enterprises?
Mathew E. Egu and
Evelyn G. Chiloane-Tsoka
Cogent Business & Management, 2023, vol. 10, issue 3, 2282750
Abstract:
Small and medium enterprises (SMEs) serve as pivotal drivers of global economic growth, a consensus reiterated by influential scholars. Yet, a critical challenge impeding their progress is the limited access to capital financing, hampering the expansion prospects of countless small businesses worldwide. In South Africa, this dilemma is especially pronounced, with many SMEs either struggling or shuttering due to financial constraints. The Johannesburg Stock Exchange (JSE) devised a solution: The Alternative Exchange (AltX), a dedicated platform designed to ease capital financing for SMEs and boost their growth. In this study, we used secondary data obtained from the lower bourse, as well as other relevant databases for the period 2003 to 2019 to ascertain its impact on SME performance. Eviews 12 statistical software package was used to carry out an Ordinary Linear Regression (OLS) empirical analysis. We find that SME listing positively influences small business performance in South Africa. Furthermore, these listed firms’ continued expansion is propelling them to become larger enterprises within a remarkably short span, transcending national borders. Our results robustly affirm a positive correlation between AltX listing, market capitalization, revenue, their Broad-Based Black Economic Empowerment (B-BBEE) score, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and improved SME performance. Moreover, this contributes to the existing literature by empirically proving that the boost in SME performance aligns with heightened GDP growth, suggesting a symbiotic relationship between the two. We recommend that policymakers should offer incentive schemes to enhance their performance given its impact on sustainable national growth and development.
Date: 2023
References: Add references at CitEc
Citations:
Downloads: (external link)
http://hdl.handle.net/10.1080/23311975.2023.2282750 (text/html)
Access to full text is restricted to subscribers.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:taf:oabmxx:v:10:y:2023:i:3:p:2282750
Ordering information: This journal article can be ordered from
http://cogentoa.tandfonline.com/journal/OABM20
DOI: 10.1080/23311975.2023.2282750
Access Statistics for this article
Cogent Business & Management is currently edited by Len Tiu Wright and Tahir Nisar
More articles in Cogent Business & Management from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().