THE INFLUENCE OF PRODUCTION SUBCONTRACTING FORMS ON THE DEVELOPMENT OF SMALL BUSINESS FIRMS IN NIGERIA

Given the numerous challenges hampering the growth and development of small business firms (SBFs) in Nigeria, this paper examines the various ways through which production subcontracting have influenced the development of SBFs in Nigeria. While the paper adopted a number of methods comprising of field observations, reference to relevant literature, and questionnaire survey of 96 SBFs, a regression analysis was used to ascertain the relationship between production subcontracting forms and SBFs development. In line with the literature, this study identified three production subcontracting forms- specialised subcontracting, supplier subcontracting and capacity subcontracting. The study evaluated the relationship between production subcontracting forms and SBFs development- cost reduction, risk reduction, access to resources and knowledge. The paper found that two production subcontracting forms-capacity subcontracting and specialised subcontracting have positive relationship with cost reduction and risk reduction while there was no relationship between these production subcontracting types and resource accessibility as well as knowledge accessibility. This paper concludes by suggesting that constraints to SBFs development in Nigeria can be improved upon by constant de-centralization of production activities by SBFs through the various productions production subcontracting forms analysed in this paper.