FIRM PRODUCTIVITY AND MARKET COMPETITION IN SMALL AND MEDIUM ENTERPRISES

Abstract

The persistent productivity gap between small and medium enterprises (SMEs) and large firms is an SME underserved productivity paradox. Utilizing market competition and firm productivity theory in SMEs, this paper outlines the relationship between the two variables and market competition. SMEs possess the paradox of productivity and employment generation, market competition, and insufficient productivity. Competition in developed countries increases innovation and efficiency, which is empirically proven. However, in many developing countries, market competition may have the opposite effect due to the insidious nature of corruption, bribery, and the misallocation of resources, which in turn, reduces sales growth, total factor productivity (TFP), and capacity utilization. In developing countries, the market competition productivity paradox is structural. There are insufficient technology diffusion, poor adoption of modern management strategies, and the poor and family management means of production. SMEs asset owned the means of production and with DIGITAL the means of production and with the means of production! " SELF “. SMEs means of production modest productivity increases with e-commerce, cloud solutions, and productivity analytics. There are NO IMPEDIMENTS to the competition product paradox in funding, cross the board regulatory constraints, and mediocre institutional frameworks. The paradox of productivity and competition resides in the regulatory environment and imploring proactive digital frameworks.

The results highlight the importance of the development of policies that are context-specific for addressing competitive pressures and institutional support to improve the performance of SMEs and promote inclusive economic growth.