ABSTRACT
Small-and medium-sized enterprises (SMEs) are considered as key to the economic growth, innovation and market competition in most developed economies (Acs and Audretsch, 1990). Likewise, they are seen as the engine of economic development and economic expansion in emerging and developing countries (e.g., Peci et al., 2012; Le and Nguyen, 2009; Baumol, 2002; Peng, 2001; Smallbone and Welter, 2001; Thornton, 1999). This holds true on many accounts, such as SMEs forming an overwhelming proportion of all business firms in emerging markets, generating 40–50 percent of their gross domestic product (GDP) and employing 70–85 percent of their total workforce (Eunni, 2007). For example, APEC (2003) delineates that SMEs comprise over 98 percent of total enterprises in Asia-Pacific. This raises the question of how SMEs positively influence the economic progress of a country. In answering this question, researchers have posited that SMEs impact economic growth through strategic orientation and initiatives (Peci et al., 2012; Audretsch, 2007; McMillan and Woodruff, 2002; Aidis, 2005). These initiatives may include introduction of innovative products and processes (Wong et al., 2005), productivity gains due to increased competition (Peci et al., 2012), job creation possibilities (Johnson and Loveman, 1995), knowledge spillover effects (Acs and Varga, 2005) as well as other aspects of social and economic development (Peci et al., 2012; Acs and Audretsch, 1990).
