Impact of Human Capital on the Performance of Small and Medium Enterprises in South West, Nigeria

Abstract

This study examined the Impact of Human Capital on the Performance of Small and Medium Enterprises (SMEs) in South West Nigeria. The specific objective assessed the effect of human capital practice on the innovativeness of SMEs in South West, Nigeria. Data were collected from the primary source using structured questionnaire. Stratified random sampling was employed to select a sample of three hundred and ninety-three (393) SMEs from a population of twenty three thousand two hundred and ninety (23,290) SMEs in the Nigerian South West states comprising Lagos, Oyo, Ogun, Osun, Ondo and Ekiti. The population was divided into small and medium enterprises after which selection from each stratum was done using simple random sampling. Analysis of the data was carried using linear regression to test the strength of relationship between the variables. Findings from the study revealed that human capital index (B=0.277, T = 13.306 and R2 = 0.323) was positive and significantly affect SMEs innovativeness. The study concluded that human capital has positive and significant impact on SMEs performance.