Government Support

Small firms in emerging economies have a key role in job creation and value creation, but their potential for sustainable growth is dependent on the ecosystem of support that surrounds them. This article creates a conceptual model on how the social enterprise ecosystem affects the sustainable growth of small businesses in Nepal based on three constructs mentioned repeatedly in the literature: government support, entrepreneurial networks, and innovation capability. Through the synthesis of secondary literature sources – no interviews or other primary data collection occurred – on entrepreneurial ecosystem, social capital and networks, dynamic capabilities, absorptive capacity, and government support, together with Nepal-specific empirical evidence, the article proposes that the entrepreneurial networks and innovation capability act as proximate drivers of sustainable growth, while the government support is operating mainly indirectly, by strengthening networks and innovation capability rather than functioning as the proximate driver of growth in its own right. This is a proposition supported by recent Nepali survey evidence that shows that entrepreneurs in Nepal perceive government support as the least effective ecosystem factor, while entrepreneurial capability and socio-cultural support have shown significant positive effects on growth intentions. The article offers a conceptual model, five propositions, and discussion of theoretical and policy implications, thereby presenting the researcher with a testable model and policymakers with a better understanding of where investment in ecosystems will yield the most results in terms of small business growth in Nepal.