Entrepreneurial Risk Tolerance and Growth of Agro-Based Small and Medium Enterprises in South-South, Nigeria

Ethel N. Onukwufor PhD; Clementina M. Ayomo PhD

doi:10.56201/wjeds.v11.no9.2026pg46.60

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Entrepreneurial Risk Tolerance and Growth of Agro-Based Small and Medium Enterprises in South-South, Nigeria

Ethel N. Onukwufor PhD, Clementina M. Ayomo PhD

Abstract

This study examined the relationship between entrepreneurial risk tolerance and growth of agro- based small and medium enterprises in South-South, Nigeria, with business growth operationalised through three measures: sales growth, profit growth, and market share growth. Anchored on Bandura's (1977) Self-Efficacy Theory of Entrepreneurship and supported by Barney's (1991) Resource-Based View, the study adopted a positivist, cross-sectional survey design. The population comprised 110 registered agro-based firms in South-South Nigeria, drawn from farming, fishery, poultry, livestock and agro-allied ventures. A census sampling technique was adopted, and four key respondents (owners and managerial staff) were purposively selected from each firm, giving a total of 440 administered questionnaires, out of which 400 were retrieved and 390 were valid and used for analysis. Data were analysed using descriptive statistics and Pearson Product Moment Correlation, aided by the Statistical Package for the Social Sciences (SPSS, version 25), with hypotheses tested at the 0.01 significance level. The results showed that risk tolerance had a very strong, positive and statistically significant relationship with sales growth (r = 0.807, p < 0.01), a moderate, positive and statistically significant relationship with profit growth (r = 0.611, p < 0.01), and a strong, positive and statistically significant relationship with market share growth (r = 0.731, p < 0.01). All three null hypotheses were rejected. The study concludes that entrepreneurial risk tolerance, reflected in owners' and managers' willingness to undertake calculated, bold and well-considered risks, is a significant driver of growth among agro-based SMEs, with its strongest influence observed on sales performance and its weakest, though still significant, influence on profit performance. It is recommended that agro-based SME owners and managers institutionalise formal risk assessment and mitigation frameworks that allow them to take calculated risks confidently, and that policymakers and financial institutions design risk-sharing instruments (such as agricultural credit guarantees and insurance schemes) that lower the cost of risk-taking for agro-based entrepreneurs. The findings extend resilience and entrepreneurial orientation literature to the under-researched agro-based SME sector in South- South Nigeria and contribute to advancing Sustainable Development Goals 8, 9 and 12 and the African Union's Agenda 2063 aspirations on inclusive growth through entrepreneurship.

Keywords

Entrepreneurial Risk ToleranceSales GrowthProfit GrowthMarket Share GrowthAgro-Based SMEsBusiness GrowthNigeria

References

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Entrepreneurial Risk Tolerance and Growth of Agro-Based Small and Medium Enterprises in South-South, Nigeria

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