The Influence of Government Policies and Business Environment on Entrepreneurial Growth in Edo State, Nigeria

Abstract

This empirical study investigates the nexus between government policy frameworks, the prevailing business environment, and the growth trajectories of small and medium-sized enterprises (SMEs) operating in Edo State, Nigeria. Despite the widely acknowledged centrality of entrepreneurship to economic development in lower-income countries, the localized policy-growth relationship remains empirically thin, largely due to persistent institutional bottlenecks, inconsistent regulatory enforcement, and limited formal support structures reported by local entrepreneurs. To bridge this gap, a cross-sectional survey design was adopted to collect primary data from 200 entrepreneurs selected across the three senatorial districts using a multistage sampling technique. The analytical framework integrated descriptive statistics, Pearson product-moment correlation, one-way analysis of variance, and multiple linear regression. All measurement instruments underwent reverse coding and item purification, with internal consistency rigorously confirmed via Cronbach's alpha coefficients. The empirical results indicate that perceived government policy (r = 0.040, p = 0.571) and the general business environment (r = -0.040, p = 0.574) lack any statistically discernible association with entrepreneurial growth. Furthermore, no significant sectoral differences in growth performance were observed (F(5, 194) = 0.823, p = 0.535). Descriptive outputs reveal only moderate entrepreneurial vitality alongside notable policy skepticism, as the majority of respondents explicitly credited their business progress to personal resilience rather than external institutional interventions.These findings collectively point to a systemic structural disconnect where policy design fails to effectively translate into tangible entrepreneurial outcomes. Crucially, the absence of significant correlations does not imply policy irrelevance; rather, it signals that weak administrative enforcement, deficient policy communication, and proactive entrepreneurial adaptation collectively dampen expected effects. Therefore, enhancing policy delivery infrastructures and broadening access to targeted support initiatives emerge as indispensable strategic priorities for fostering sustainable SME growth in Edo State.

Classification: M13 (New Firms; Startups); O17 (Formal and Informal Sectors); L26 (Entrepreneurship)