Munich Personal RePEc Archive

The effects of owners' family hardship on micro and small firms' growth: an evidence from Indonesia

Parinduri, Rasyad (2012): The effects of owners' family hardship on micro and small firms' growth: an evidence from Indonesia.

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Abstract

I examine whether family hardship experienced by owners of micro and small firms affects the firms' growth. Based on a representative sample of owners of firms in Indonesia, and using deaths of owners' family members as a measure of hardship, I estimate the effects of family hardship on firms' total assets. I find that family hardship leads to about 30 percent smaller assets on average. Moreover, the magnitude of the effects is larger the smaller the firms are. These findings indicate that growth of micro and small firms is severely constrained by the availability of resources such as internally generated finance.

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