Abstract

While the literturte on SMEs performace foucused on the enabling external environement, little research focused on internal factors, mainly training. Moreover, most studies ignored enterprises that don't train their employees. This study addresses this issue and contributes to knowledge in two ways. First, it conceptualises training as a three stage process: in stage one, the manager decides whether to train employees or not. In stage two, mangers who decide to train their employees determine their demand for training measured by training expenditures. In stage three, training impact can be assessed. Secondly, the study identifies the detreminants of training and examines its impact on SMEs performance. The study found that manager's charatcteristics, enterprise's characteristics and other factors affect both the manager's decision in stage one and training expenditures. More importantly, the study found that training has a positive impact on SMEs' performance as measured by profits, revenues and employment growth.

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