The Role of Government Policies Towards Entrepreneurship in Developing Small-Medium Enterprises (SMEs) in the Libyan Economic Environment

  • Emad Nassr

Student thesis: Doctoral Thesis


Most economies heavily rely on SMEs due to their contributions to innovation, social inclusion, employment, and income growth. This holds particularly true for developing countries, where SMEs constitute a majority of businesses and make significant contributions to GDP. However, there is a research gap in understanding the effectiveness of government policies on SME development from an entrepreneurial perspective, especially in emerging and transitional economies like Libya. Limited attention has been given to the role of these government policies in driving economic development. This thesis aims to address this knowledge gap by investigating the most important the factors influencing the growth and development of SMEs. In line with the research objectives, a mixed-methods approach was employed, combining qualitative and quantitative methodologies. Primary data were collected through an online questionnaire involving 224 respondents and 13 semi-structured interviews with senior managers/owners of SMEs, Libyan government officials, and academic experts. Quantitative data were analysed using descriptive analysis and bivariate correlation matrix in SPSS, while NVivo software facilitated thematic analysis of the interview transcripts.

The results highlight the significance of macro-level policies, such as economic stability and government regulations, in fostering SME development in Libya. Additionally, micro-level policy factors like fiscal policy, infrastructure, research and development (R&D), training, and market access were found to have varying degrees of importance in supporting SMEs, aligning with existing literature. Furthermore, the findings reveal that SMEs face significant obstacles in the Libyan business environment, with corruption being the most prominent constraint. Other challenges include limited access to finance, administrative bureaucracy, poor infrastructure, legal practices, and market competition. On the other hand, entrepreneurship-focused government initiatives in HEIs, including entrepreneurship curriculum, business incubators, and government training programs, were identified as crucial drivers of an entrepreneurial culture in the Libyan business sector. Lastly, the study highlights differences in perceptions the Libyan decision-makers and the entrepreneurial community regarding the improvement of the entrepreneurial business environment. Political stability, anti-corruption measures, and financial accessibility were identified as key considerations for strengthening the entrepreneurial environment. Given the high macroeconomic risk and volatility, the findings emphasise the importance of contextual factors in understanding entrepreneurship in Libya.
Date of Award19 Sep 2023
Original languageEnglish
SupervisorKalim Siddiqui (Main Supervisor) & Shabbir Dastgir (Co-Supervisor)

Cite this