A model for predicting the growth of small and medium scale contractors (SMSC) in Ghana: emphasis on the three Northern Regions

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October, 2015
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Small and Medium Enterprises (SMEs) the world over form the bedrock of economic growth because of their ability to respond to the systemic economic shocks rapidly and their potential to generate jobs and income at the time when the large firm sector is undergoing a rapid decline and shedding jobs. The construction industry which is numerically dominated by SMEs is a strategic asset for employment generation, poverty reduction, redistribution of wealth and improvement in quality of life due to its forward and backward linkages with other sectors of the economy. Studies on the growth of SMEs in the construction industry in developing countries and Ghana in particular, have been generally scanty. However for SMEs to be well positioned to make the much needed economic impact there is the need to understand the factors that influence their growth so that policy guidelines can be formulated accordingly. Thus this study sought to identify key factors that influence the growth of Small and Medium Scale Contractors (SMSC) in Ghana and a model for predicting their growth developed thereof. The study adopted a mixed research approach where preliminary interviews were conducted and subsequently the resource base theory of business growth was adopted in developing questionnaires which were answered by SMSC in Ghana. The data from the quantitative survey was analyzed using multiple regression analysis (stepwise option). An R2 value of 0.619 was realized, suggesting that 61.9% of growth of SMSC in Ghana is accounted for by the findings. The findings show that lack of government support, unprofessional conduct of consultants, Delayed payment for work done, High staff turnover, Low educational level of contractor and Poor management expertise all show negative correlation with the growth of SMSC and thus tend to impede the growth. The findings also show that absence of politics in contracting, upgrading staff, availability of capital, comparing performance with peers in the industry all show positive correlation with the growth of SMSC and thus tend to enhance growth. The findings provide empirical evidence for adoption by policy makers and SMSC in Ghana that could enhance growth of SMSC.
A thesis submitted to the Department of Building Technology ,Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirement for the Degree of Master of Philosophy in Building Technology,
SME, SMSC, Growth, Ghana, Framework