EFFECT OF ENTREPRENEURIAL SELF-EFFICACY ON FIRM PERFORMANCE (CASE OF MICRO AND SMALL-SCALE ENTERPRISES; ARBA MINCH TOWN)

Abstract

The purpose of this research was to examine the effect of entrepreneurial self-efficacy on firm performance. The research adopted a descriptive and explanatory type of research design with quantitative research approach whereas cross-sectional data was gathered from 289 owner, manager and/or employees of micro and small-scale enterprises in Arba Minch town using simple random sampling technique via stratified sampling technique. The data was collected through standardized seven-point Likert-scale questionnaire and analyzed using both descriptive (frequency, percentage, mean and standard deviation) as well as inferential statistics (MANOVA, T-test and ANOVA) with help of SPSS version 20. Thus, the findings of the study indicated that, the frequency and distributions of respondents mean and standard deviation shows that all entrepreneurial self-efficacy dimensions of micro and small enterprises in Arba Minch town were at medium level which requires future improvement. Correlation and regression result also show that entrepreneurial self-efficacy dimensions have positive and significant effect on firm performance. Among correlation results, financial control self-efficacy has positive and significant association with firm, followed by marketing strategy self-efficacy and these are the two variables which exhibit highest positive and significant effect on firm performance. From regression results of the five dimensions, marketing strategy self-efficacy has the highest predictor followed by innovation self-efficacy and management. Based on the finding of the study the researcher forwarded recommendations to the concerned bodies that they should work on all variables incorporated more than the current status since they have significant impact on firm performance to improve the overall performance of micro and small-scale enterprises in particular and encourage the economic development of Ethiopia in general.