The Influence of Institutional Factors on the Growth Intentions of Township SMEs in Johannesburg and Ekurhuleni Metropolitan, South Africa

Abstract

Small and medium-sized enterprises' (SMEs') growth in the townships of Johannesburg and Ekurhuleni hasn't really gotten the attention it deserves in South African research. This research sought to investigate how institutional factors influence the Growth Intentions of township SMEs in these areas. The Theory of Planned Behaviour (TPB) in relation to enterprise and Institutional Theory (IT) served as the foundation for this study. This study was carried out utilising a post-positivist methodology using a quantitative, cross- sectional approach. Using a questionnaire sent through Qualtrics, 200 township SMEs in the Johannesburg and Ekurhuleni metropolitan districts provided primary data. Multiple regression analysis was then performed using the Statistical Package for the Social Sciences to test the hypotheses. The results indicated that none of the variables had a statistically significant influence on Growth Intentions. Access to finance showed a very weak positive influence, but this was not significant. Likewise, both the regulatory environment and level of education demonstrated weak positive influences, which were also statistically insignificant. Infrastructure availability exhibited a weak negative influence that lacked significance. Moreover, the correlation between access to finance and Growth Intentions was not significantly influenced by innovativeness. This study adds some valuable insights to the existing knowledge on entrepreneurship, emphasising key barriers faced by township SMEs and suggesting practical methods for getting past them. This research suggests a different method for comprehending and dealing with the Growth Intentions of SMEs within the township areas of Johannesburg and Ekurhuleni metropolitan regions. It posits that policymakers have a critical role in mitigating key barriers such as access to finance, regulatory challenges, educational attainment, and infrastructure limitations within resource-constrained environments. The study advocates for targeted, systematic support to directly tackle these challenges and encourage SME growth.