Abstract/Summary

Small and medium enterprises (SMEs) play an important role in many countries around the world, their role is through their abilities to revitalizing the economy and reducing unemployment. The significance of SMEs is particularly, to the countries that are seeking to diversify their economic base such as Libya. The main aim of this study is to investigate the barriers to small and medium enterprises (SMEs) growth and development in Libya, particularly in two cities (Tripoli and Misurata). The study has three objectives as follows: (1) To investigate the current situation of the small and medium enterprises growth in Libya (Tripoli and Misurata). (2) To explore the barriers that influence the growth of SMEs in Libya. (3) To develop a conceptual model highlighting the influence of characteristics of the firm , owners and barriers on the growth of the Libyan SMEs. This study examines the effect of firm-owner characteristics as well as perceived barriers on the growth and development of SMEs in Libya. This thesis utilised quantitative method through a questionnaire survey to 400 owner-managers located in two cities in Libya (Tripoli and Misurata). The collected data was analysed by using the Statistical Package for the Social Science (SPSS) for descriptive analysis and Stata for ordered logit regression analysis. Findings from this study that are based on the ordered model of growth regression show that both age and size of the firm have significant negative impact on the SMEs growth in Libya while management qualifications and growth aspiration of the entrepreneur have significant positive impact on the growth of firms. The findings also indicate that a list of 14 barriers that were perceived by entrepreneurs had a significant negative effect on the growth and development of SMEs. These barriers were drawn from the literature and so, the literature thus informed the survey design. This study suggests the following recommendations among others; creation of a peaceful political atmosphere that can engender a conducive business environment and ensure sustainable growth and development of SMEs in Libya, putting in place appropriate meaningful and comprehensive economic policies that can improve business climate through legislations.