The impact of personal and legal factors on the success of entrepreneurs: emphasis on micro and small enterprises in addis ababa

Abstract

This study investigates the impact of personal and legal factors on success of entrepreneurs and their contribution for the employment generation and capital growth. This study further aims at identifying the relationship between personal factors of the entrepreneurs and their success, assessing government measures taken to promote MSEs success and describing legal factors contribution for success of MSEs. A self administered questionnaires and semi structured interview were used for data collection. The questionnaire was distributed to 190 randomly selected respondents; resulted in 160 viable responses for data analysis. A semi structured interview was held with officials of MSEs of Addis Ababa in the sampled sub cities, namely, Lideta and Kolfe Keranyo. A collected data were then analyzed using descriptive statistics and logistic regression. The result reveals that 117(73%) enterprises were shown capital growth and 43(26.9%) were not. Whereas, 61(38.1%) enterprises were grow in terms of employment and 99(61.9%) were not. The result of logistic regression shows Age of the owner, Industry experience, and legal factors are significantly and positively related to employment growth/ success except for age of the owners which is negatively related to employment growth and Ho was rejected. Whereas, education of the owner, family background, property protection, financial factors, training, government support and management experience effect was insignificant. In the second model, which is measuring capital growth, Ho was rejected and Industry experience, Management experience, Training of the owner, financial, Marketing and legal factors are found significant and positively related to success. And also, age of the owner, Education, government support and property protection contribution for capital growth were found insignificant. As such, some personal characteristics and government support programmes have a positive impact on success of entrepreneurs.