Modeling the Factors Influencing the Growth of Small and Medium Size Construction Firms in Ghana

Abstract

For small and medium size construction firms (SMSCF) to be well positioned to make the much needed economic impact there is the need to understand the factors that influence their growth so that policy guidelines can be formulated to enhance their effective participation in the construction industry. This study sought to identify key factors that influence the growth of SMSCF in Ghana and develop a model that could predict their growth. The study adopted a mixed research approach where preliminary interviews were conducted and subsequently surveys undertaken among SMSCF with the aid of questionnaires. Multiple regression analysis (stepwise option) was performed. An adjusted R² value of 0.619 was realized, indicating that 61.9 per cent of growth of SMSCF in Ghana is accounted for by the findings. The findings show that lack of government support, unprofessional conduct of consultants, delayed payment for work done, high staff turnover, low educational level of contractor and poor management expertise all show negative correlation with the growth of SMSCF and thus tend to impede growth. The findings also show that absence of politics in contracting, upgrading staff, availability of capital, comparing performance with peers in the industry all show positive correlation with the growth of SMSCF and thus tend to enhance growth. The findings provide empirical evidence for adoption by policy makers and SMSCF in Ghana that could enhance growth of SMSF.

Keywords: model, Ghana, Growth, SME, SMSCF,

DOI: 10.7176/JESD/11-12-15

Publication date:June 30th 2020