Abstract:

Small and Medium Enterprises (SMEs) are widely acclaimed as being pivotal to the economic and industrial development of developed and developing nations. The realization of this expectation in Nigeria is meted with a plethora of challenges that characterise the macro environment of SMEs. This study examines the impact of formal institutional environment of the entrepreneurial climate and its implications for entrepreneurial venture performance in Nigeria. A descriptive research method involving the use of Structural Equation Modeling and Confirmatory Factor Analysis were adopted to analyse 400 copies of questionnaire administered to SMEs owner- managers in three geo-political zones in Nigeria using stratified and simple random sampling techniques. The study revealed that both structural support system and government incentives have positive significant impact on venture performance. This suggest that road infrastructure, research and development and water infrastructure, are the most important predictor of venture performance followed by electricity infrastructure, patent right and intellectual property protection and access to capital. We therefore recommend the setting up of appropriate institutional and stable micro-economic policy framework that caters for the interest of SMEs practitioners and policy makers.

Keywords:

Entrepreneurial Climate, Institutional Environment, Entrepreneurial Ventures, Performance, SMEs.