Journal of Economics and Management Volume 20, No. 2 September, 2024

From Start-up to Scale-up: The motivators of SME owners to Expand Their Business in Developing Economies

Oluyemi T. Adeosun

Department of Economics, University of Lagos, Nigeria

Chikere N. Ann

Department of Business Administration, Augustine University, Lagos, Nigeria

Temitope J. Owolabi

Department of Sociology, University of Lagos, Nigeria

Abstract

This paper seeks to enhance our understanding of the factors that make entrepreneurs expand their businesses. The existing literature has focused more on the start-up of businesses. We explore the role of information and communication technology, growth motivation, logistics, and the firm's financial improvement in scaling up small and medium enterprises (SMEs) by Nigerian owner-managers. A survey method was used to gather data from small business owners and managers in selected cities in Nigeria. A partial least squares structural equation model (PLS-SEM) was employed to test the proposed model with smart PLS3. The result shows a significant relationship between information and communication technology and SME expansion. Also, the relationship between improved logistics and SME expansion shows a positive significance between the two variables. Furthermore, this research reiterates that the more a firm is financially buoyant, the more expansion it will experience. Lastly, managers' growth motivation positively and significantly impacts SME expansion. The study attempts to contribute to the existing literature by examining the moderating effects of improved logistics, a firm’s financial performance, ICT, and other dimensions on SME expansion or the factors that aid the creation of multiple branches.

Keywords：Expansion, ICT, Logistics, Managers Motivation, SMEs and Firm’s Financial SME Performance, Start-ups

JEL Classifications：O04

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