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AbstractThis study investigates the complex relationship between small- and medium-sized enterprises (SMMEs) and socio-economic factors in post-apartheid South Africa. Hence, we use a robust econometric framework to assess how SMME proliferation affects job creation, income redistribution, infrastructural development and GDP growth during two pivotal periods (1995–2010 and 1995–2023). We employed an ordinary least squares (OLS) regression model technique for analyzing relevant secondary datasets using the free EViews 12 student version (SV) x64 statistical software analytical package. During the period 1995–2010, we find that heightened SMME proliferation correlates positively and significantly with job creation, particularly in cases of opportunity-driven entrepreneurship. Moreover, the study underscores a direct link between SMME expansion and increased GDP growth, underscoring the vital role of these enterprises in shaping the economic landscape. However, in the extended period spanning 1995–2023, which encompasses both economic booms and recessions, the potential of opportunity-driven SMMEs wanes, attributed partly to business closures amid a recession. The major contribution of this study is that a combination of factors influences the impact SMMEs have on various socio-economic indicators. The insights gleaned from this research deepen our understanding of the intricate connections between SMMEs and broader socio-economic factors, offering valuable implications for policymakers and practitioners aiming to foster sustainable economic development.

AbstractSmall and medium enterprises (SMEs) serve as pivotal drivers of global economic growth, a consensus reiterated by influential scholars. Yet, a critical challenge impeding their progress is the limited access to capital financing, hampering the expansion prospects of countless small businesses worldwide. In South Africa, this dilemma is especially pronounced, with many SMEs either struggling or shuttering due to financial constraints. The Johannesburg Stock Exchange (JSE) devised a solution: The Alternative Exchange (AltX), a dedicated platform designed to ease capital financing for SMEs and boost their growth. In this study, we used secondary data obtained from the lower bourse, as well as other relevant databases for the period 2003 to 2019 to ascertain its impact on SME performance. Eviews 12 statistical software package was used to carry out an Ordinary Linear Regression (OLS) empirical analysis. We find that SME listing positively influences small business performance in South Africa. Furthermore, these listed firms’ continued expansion is propelling them to become larger enterprises within a remarkably short span, transcending national borders. Our results robustly affirm a positive correlation between AltX listing, market capitalization, revenue, their Broad-Based Black Economic Empowerment (B-BBEE) score, Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), and improved SME performance. Moreover, this contributes to the existing literature by empirically proving that the boost in SME performance aligns with heightened GDP growth, suggesting a symbiotic relationship between the two. We recommend that policymakers should offer incentive schemes to enhance their performance given its impact on sustainable national growth and development.