Internationalization of Micro, Small, and Medium Enterprises and Start-Ups in Ghana: Challenges and Drivers

The contribution of SME’s towards the macroeconomics growth and development of the Ghanaian economy is of no doubt significant. At the microlevel, MSME’s help reduce household level poverty, unemployment and boost entrepreneurial activities. Despite this, the growth of MSMEs in Ghana has been significantly low, with majority unable to enter the international market or dying with the owner. This study investigated the drivers of SME’s and start-ups growth in Ghana and the factors influencing their internationalization. More specifically, the study examines the motives, challenges and inhibiting factors responsible for the internationalization of MSMEs and start- ups in Ghana. Using the cross-sectional data gathered from a sample of 500 entrepreneurs across all the districts in the greater Accra region of Ghana, the descriptive statistics and logit regression analysis was performed. Results from the descriptive statistics shows that frequent power fluctuation and outages, the lack of access to finance, government policies and the risk preferences of the business owner are major drivers of MSMEs and start-up growth in Ghana. The logit regression analysis shows that apart from socioeconomic characteristics, the inability of Ghanaian firms to adopt advance technology, high cost of production, risk preference of the owner, poor quality of the product produce, inadequate capital and the international regulations and competition were the main factors obstructing Ghanaian MSME’s from entering into the international market. The study recommends that for MSME’s to thrive in Ghana and dare to enter the international market there is the need for policies favouring internalisation, sustainable energy supply, cultural and attitudinal change and better government regulation.