DETERMINANT FACTORS OF INDUSTRIAL INTEGRATION OF SMALL AND MEDIUM ENTERPRISES IN MANUFACTURING SECTOR IN TIGRAY REGIONAL STATE, ETHIOPIA
The process of economic integration has created opportunities and increased pressure for SMEs to expand their value and form partnerships and strategic alliances with local and foreign organizations to facilitate the production and distribution of products in the local global market. The objective of this study was to identify the determinant factors that affect the integration of small- and medium-sized enterprises. The study used cross-sectional mixed approaches to qualitative and quantitative methods (descriptive and econometric analysis). Primary data was collected from a sample of 138 SMEs, selected based on proportional stratified sampling, after a pilot test was conducted. Interviews with 20 leaders and stakeholders directly involved with the SMEs operations and the researcher's observation during the pilot test. The result indicates that SMEs are determined by the knowledge of the strategies and skills of implementers and SME operators, business development services, working promises provided by the government, the selection of subsectors and types of SMEs to provide the supporting package , market linkage, and quality and quantity of inputs, and political stability in the country. This study concludes that provision of support, adequate knowledge of SMEs' strategy, BDS, and selection of an appropriate sector are the main factors determining the SME’s operation. Thus, the government should amend rules and regulations to make them clear and simple and enhance the capacity of SMEs to penetrate the local and global markets. All the levels of government need to introduce consistent and reliable development policies and strategies favorable to SME sector growth, especially to agroprossesing subsectors. Finally, establishing special financial institutions and market supporting units might help SMEs' competitiveness. Work premises for production and marketing as well as infrastructure should be ready before the SMEs are established.