Market Risk as a Determinant of Small Businesses Sustainability in Mogadishu, Somalia

Abstract

 This study examined the impact of market risk as a Determinant of Small businesses Sustainability in Mogadishu, Somalia, with particular emphasis on economic risk, competitive risk, and regulatory risk. A quantitative correlational research design was employed to investigate the relationships between market risk dimensions and small business sustainability. Data were collected from 310 respondents, including small business owners, managers, and employees, through a structured questionnaire using a simple random sampling technique. The data were analyzed using IBM SPSS statistics version 29, applying descriptive statistics and Pearson correlation analysis to examine the relationships among economic risk (ER), competitive risk (CR), regulatory risk (RR), and small business sustainability (SBS). The descriptive findings indicated that respondents generally agreed that fluctuations in economic conditions, intense market competition, and regulatory uncertainty significantly influence business sustainability. Pearson correlation analysis revealed statistically significant positive relationships between economic risk and small business sustainability (r = 0.602, p < 0.01), competitive risk and sustainability (r = 0.593, p < 0.01), and regulatory risk and sustainability (r = 0.549, p < 0.01). The analysis further showed strong positive associations among the three market risk dimensions, suggesting that they are closely interconnected within the business environment. The principal contribution of this study is the provision of empirical evidence that market risk dimensions collectively shape the sustainability of small businesses in Mogadishu. Overall, the findings highlight the importance of strengthening risk management practices, enhancing strategic planning, promoting innovation, and improving regulatory stability to increase business resilience and support the long-term sustainability of SMEs in Somalia.