Factors determining the location of small and medium enterprises in a developing economy

Hasnah Ali, Sanep Ahmad, Amiah @ Amriah Buang, Noraziah Ali

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Small medium enterprises (SMEs) contribute tremendously towards the development of a country, including efficient allocation of resources, employment and development of indigenous entrepreneurship, equitable growth and poverty eradication. As with all economic catalysts the very location of SMEs has important bearings on their potential to spur and spread the benefits of their growth. This study used primary data obtained from fieldwork observations of 728 Malaysian firms. Factor analysis was performed to identify several important factors that affect the choice of the SME industrial location after which a logistics analysis was performed to identify which factors were significant in influencing the eventual placing of the industry. The results showed that from a total of 81 factors identified, nine principal factor groups were found to have determined the location of SMEs in the Malaysian case. These were INTERNATIONAL competitiveness, community related matters, water supply and rates, transportation costs, cargo costs, fuel supply and rates, industrial land availability, market and consumer related matters and environmental quality and laws. In conclusion, two principal factors critically determined the firms' location, viz. the availability of affordable land and affordable energy supplies. The implication is that the Malaysian government would have to pay more attention to ways and means of making land and energy affordable to the SMEs. The authorities would also have to ensure that not only is affordable land available but that affordable land also has ease of easy physical accessibility.

Original languageEnglish
Pages (from-to)99-103
Number of pages5
JournalWorld Applied Sciences Journal
Volume13
Issue number13
Publication statusPublished - 2011

Fingerprint

Developing economies
Factors
Small and medium-sized enterprises
Energy
Factor analysis
Environmental law
Authority
Placing
Firm location
Eradication
Efficient allocation
Indigenous entrepreneurship
Logistics
Catalyst
Industrial location
Water supply
Environmental quality
Transportation costs
Resources
Competitiveness

Keywords

  • Efficient allocation
  • Factor analysis
  • Small medium enterprises (SMEs)
  • SME's location

ASJC Scopus subject areas

  • General

Cite this

Factors determining the location of small and medium enterprises in a developing economy. / Ali, Hasnah; Ahmad, Sanep; Buang, Amiah @ Amriah; Ali, Noraziah.

In: World Applied Sciences Journal, Vol. 13, No. 13, 2011, p. 99-103.

Research output: Contribution to journalArticle

Ali, Hasnah ; Ahmad, Sanep ; Buang, Amiah @ Amriah ; Ali, Noraziah. / Factors determining the location of small and medium enterprises in a developing economy. In: World Applied Sciences Journal. 2011 ; Vol. 13, No. 13. pp. 99-103.
@article{0f7181326218432cb5fa311b0d9dd989,
title = "Factors determining the location of small and medium enterprises in a developing economy",
abstract = "Small medium enterprises (SMEs) contribute tremendously towards the development of a country, including efficient allocation of resources, employment and development of indigenous entrepreneurship, equitable growth and poverty eradication. As with all economic catalysts the very location of SMEs has important bearings on their potential to spur and spread the benefits of their growth. This study used primary data obtained from fieldwork observations of 728 Malaysian firms. Factor analysis was performed to identify several important factors that affect the choice of the SME industrial location after which a logistics analysis was performed to identify which factors were significant in influencing the eventual placing of the industry. The results showed that from a total of 81 factors identified, nine principal factor groups were found to have determined the location of SMEs in the Malaysian case. These were INTERNATIONAL competitiveness, community related matters, water supply and rates, transportation costs, cargo costs, fuel supply and rates, industrial land availability, market and consumer related matters and environmental quality and laws. In conclusion, two principal factors critically determined the firms' location, viz. the availability of affordable land and affordable energy supplies. The implication is that the Malaysian government would have to pay more attention to ways and means of making land and energy affordable to the SMEs. The authorities would also have to ensure that not only is affordable land available but that affordable land also has ease of easy physical accessibility.",
keywords = "Efficient allocation, Factor analysis, Small medium enterprises (SMEs), SME's location",
author = "Hasnah Ali and Sanep Ahmad and Buang, {Amiah @ Amriah} and Noraziah Ali",
year = "2011",
language = "English",
volume = "13",
pages = "99--103",
journal = "World Applied Sciences Journal",
issn = "1818-4952",
publisher = "International Digital Organization for Scientific Information",
number = "13",

}

TY - JOUR

T1 - Factors determining the location of small and medium enterprises in a developing economy

AU - Ali, Hasnah

AU - Ahmad, Sanep

AU - Buang, Amiah @ Amriah

AU - Ali, Noraziah

PY - 2011

Y1 - 2011

N2 - Small medium enterprises (SMEs) contribute tremendously towards the development of a country, including efficient allocation of resources, employment and development of indigenous entrepreneurship, equitable growth and poverty eradication. As with all economic catalysts the very location of SMEs has important bearings on their potential to spur and spread the benefits of their growth. This study used primary data obtained from fieldwork observations of 728 Malaysian firms. Factor analysis was performed to identify several important factors that affect the choice of the SME industrial location after which a logistics analysis was performed to identify which factors were significant in influencing the eventual placing of the industry. The results showed that from a total of 81 factors identified, nine principal factor groups were found to have determined the location of SMEs in the Malaysian case. These were INTERNATIONAL competitiveness, community related matters, water supply and rates, transportation costs, cargo costs, fuel supply and rates, industrial land availability, market and consumer related matters and environmental quality and laws. In conclusion, two principal factors critically determined the firms' location, viz. the availability of affordable land and affordable energy supplies. The implication is that the Malaysian government would have to pay more attention to ways and means of making land and energy affordable to the SMEs. The authorities would also have to ensure that not only is affordable land available but that affordable land also has ease of easy physical accessibility.

AB - Small medium enterprises (SMEs) contribute tremendously towards the development of a country, including efficient allocation of resources, employment and development of indigenous entrepreneurship, equitable growth and poverty eradication. As with all economic catalysts the very location of SMEs has important bearings on their potential to spur and spread the benefits of their growth. This study used primary data obtained from fieldwork observations of 728 Malaysian firms. Factor analysis was performed to identify several important factors that affect the choice of the SME industrial location after which a logistics analysis was performed to identify which factors were significant in influencing the eventual placing of the industry. The results showed that from a total of 81 factors identified, nine principal factor groups were found to have determined the location of SMEs in the Malaysian case. These were INTERNATIONAL competitiveness, community related matters, water supply and rates, transportation costs, cargo costs, fuel supply and rates, industrial land availability, market and consumer related matters and environmental quality and laws. In conclusion, two principal factors critically determined the firms' location, viz. the availability of affordable land and affordable energy supplies. The implication is that the Malaysian government would have to pay more attention to ways and means of making land and energy affordable to the SMEs. The authorities would also have to ensure that not only is affordable land available but that affordable land also has ease of easy physical accessibility.

KW - Efficient allocation

KW - Factor analysis

KW - Small medium enterprises (SMEs)

KW - SME's location

UR - http://www.scopus.com/inward/record.url?scp=84863907304&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84863907304&partnerID=8YFLogxK

M3 - Article

AN - SCOPUS:84863907304

VL - 13

SP - 99

EP - 103

JO - World Applied Sciences Journal

JF - World Applied Sciences Journal

SN - 1818-4952

IS - 13

ER -