Firm reputation and financial performance of SMEs: the Ghanaian perspective

Abstract

Our paper examines the effects of firm reputation on financial performance of small and medium scale enterprises (SMEs) in Ghana by controlling for firm specific variables such as firm age, firm size, owner/manager’s age, leverage and access to capital. It contributes to our knowledge on how firm reputation enhances the financial performance of SMEs in developing economies. We employed primary data from 423 SMEs within the Accra Metropolis. Standard regression analysis was used to analyse the data. We documented a significant positive association between firm reputation and firm performance, denoting that high corporate reputation by an SME enhances its performance. In addition, with the exception of firm size, there was a significant positive relationship between all the control variables and financial performance of SMEs.