Impact of Service Offerings of Business Incubators on Performance of Micro, Small and Medium Sized Enterprises in Nicaragua.

Abstract

Business Incubators play a significant role in the development of Micro, Small and Medium Sized Enterprises (MSMEs) in Nicaragua. Therefore, this research examined the impact of the service offerings of business incubators on MSMEs performance. Specifically, this study assessed which aspects of performance are more likely to be affected by the four types of assistance incubators provide, namely technology, financing, networking and training. The aspects of performance studied are product/service innovation, quality of the product/service, capacity to respond to market demand, and internal organizational administration. A quantitative study was conducted with the use of SPSS and SmartPLS software in order to statistically analyze the information gathered from 100 MSMEs who had been or are current tenants in a business incubator in Nicaragua. It was found that training and technology assistance are the two service offerings more likely to have a positive effect on the performance of MSMEs. Quality of product/service is more likely to happen if technology assistance is provided, and innovation of product/service if training is provided. These two service offerings seemed to have a positive effect on formal organization administration as well. Financing did not seem to have any relation to MSMEs’ performance. Since the majority of responses came from tenants of two incubators, the results can be a reflection on the assistance provided by these two institutions, and are limited in generalizing to other contexts.

Business Incubators play a significant role in the development of Micro, Small and Medium Sized Enterprises (MSMEs) in Nicaragua. Therefore, this research examined the impact of the service offerings of business incubators on MSMEs performance. Specifically, this study assessed which aspects of performance are more likely to be affected by the four types of assistance incubators provide, namely technology, financing, networking and training. The aspects of performance studied are product/service innovation, quality of the product/service, capacity to respond to market demand, and internal organizational administration. A quantitative study was conducted with the use of SPSS and SmartPLS software in order to statistically analyze the information gathered from 100 MSMEs who had been or are current tenants in a business incubator in Nicaragua. It was found that training and technology assistance are the two service offerings more likely to have a positive effect on the performance of MSMEs. Quality of product/service is more likely to happen if technology assistance is provided, and innovation of product/service if training is provided. These two service offerings seemed to have a positive effect on formal organization administration as well. Financing did not seem to have any relation to MSMEs’ performance. Since the majority of responses came from tenants of two incubators, the results can be a reflection on the assistance provided by these two institutions, and are limited in generalizing to other contexts.