Growth Determinants of Micro and Small Enterprises: Empirical Evidence from Eastern Zone, Tigray Regional State of Ethiopia

The ultimate aim of this study was to identify the growth determinants of micro and small enterprises in Eastern Zone of Tigray. For analysis purpose, the study used a cross sectional primary data of 285 sampled enterprises. To identify the factors determining the growth of enterprises, logistic regression model was applied. Accordingly, the result revealed, the main determinant factors that positively affect the likelihood of enterprises growth to be engagement in service sector, capital accumulation of an enterprise and educational level of employees of an enterprise. Contrarily, age and size of an enterprise were found to have a negative and significant effect on enterprises likelihood of growing. In general, it can be concluded that this study provides a theoretical proposition consistent with the learning hypothesis (smaller and younger firms grow faster than larger and older firms).