An Appraisal of Production Subcontracting Toward Small and Medium Scale Enterprises Development in the Nigeria Industrial Sector: A Review Approach

Abstract

This paper is an appraisal of production subcontracting and how it stimulates the survival of small and medium scale enterprises (SMEs) in the Nigeria industrial sector. The aim of this article is to extend the debate on the desirability of production subcontracting between SMEs and its relevance to industrial development policy in Nigeria. The analysis in this paper was based on a desktop review of 15 articles published in Nigeria on production subcontracting and SMEs within a 19-year period (2001–2019). These articles were drawn from peer-reviewed journal articles. This paper found that on the basis of a critical review of literature, research on production subcontracting has apparently enjoyed a smidgen of global acceptance as was shown by its high quality of publications. This paper also found that production subcontracting strategy has been instrumental in the survival of SMEs in the Nigerian industrial sector through its abilities to guarantee reduction in operational cost, risk reduction, and resources accessibility. The found an emerging area of research in production subcontracting which suggests that production subcontracting increases firm performance in the areas of profit growth, market share, and organizational profit. This paper suggested that given the significant contributions of production subcontracting in the SMEs sector, the strategy deserves development and policy support in the country.