Fighting the Odds: Understanding Small Business Mortality in Low-Income Countries

Yeboah, Samuel (2022): Fighting the Odds: Understanding Small Business Mortality in Low-Income Countries.

Abstract

This systematic review examines the factors influencing small business mortality in low-income countries. Small businesses play a vital role in economic development, job creation, and poverty reduction. However, they often face significant challenges that lead to high mortality rates. This review analyses the internal and external factors contributing to small business failure, including poor management, lack of entrepreneurial skills, economic downturns, market competition, regulatory burdens, and technological advancements. The implications of small business mortality, such as job losses, reduced economic output, and personal distress, are also explored. Additionally, the review highlights policy implications, including the importance of strengthening entrepreneurial skills, improving access to finance, streamlining regulatory processes, and facilitating market linkages. Future research directions, such as longitudinal studies and the impact of technology adoption, are identified to further deepen understanding in this area. By addressing the challenges faced by small businesses in low-income countries, policymakers can foster their sustainability and contribute to inclusive economic development.

• Item Type: MPRA Paper
• Language: English
• Keywords: Small business mortality, low-income countries, factors, implications, policy, entrepreneurship
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration > M13 - New Firms ; Startups; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development

References

Acs, Z. J., & Szerb, L. (2009). The global entrepreneurship index (GEINDEX). Foundations and Trends in Entrepreneurship, 5(5), 341-435.

Audretsch, D. B., & Keilbach, M. (2004). Entrepreneurship capital and economic performance. Regional Studies, 38(8), 949-959.

Ayyagari, M., Beck, T., & Demirgüç-Kunt, A. (2007). Small and medium enterprises across the globe. Small Business Economics, 29(4), 415-434.

Becker-Blease, J. R., & Sohl, J. E. (2007). Do women-owned businesses have equal access to angel capital? Journal of Business Venturing, 22(4), 503-521.

Cardon, M. S., Stevens, C. E., & Potter, D. R. (2011). Misfortunes or mistakes? Cultural sensemaking of entrepreneurial failure. Journal of Business Venturing, 26(1), 79-92.

Coad, A., Daunfeldt, S. O., Johansson, D., & Wennberg, K. (2014). Whom do high-growth firms hire? Industrial and Corporate Change, 23(1), 293-327.

Coad, A., Segarra, A., & Teruel, M. (2016). Innovation and firm growth: Do firm age play a role? Research Policy, 45(2), 387-400.

Cowling, M., & Taylor, M. (2001). Entrepreneurial women and men: Two different species? Small Business Economics, 16(3), 167-175.

Daines, R., & Acs, Z. J. (2013). Entrepreneurship and its determinants in a cross-country setting. Journal of Business Venturing, 28(1), 176-187.

Davidsson, P., & Henrekson, M. (2002). Determinants of the prevalence of start-ups and high-growth firms. Small Business Economics, 19(2), 81-104.

Dell'Anno, R., & Nabavi, P. (2012). The role of business economic context for boosting innovation performance of small firms. Small Business Economics, 39(1), 161-178.

Giménez-Roche, G. (2020). The mortality of new firms: Firm-specific and regional determinants. Small Business Economics, 55(4), 1121-1153.

Haltiwanger, J., Jarmin, R. S., & Miranda, J. (2013). Who creates jobs? Small vs. large vs. young. Review of Economics and Statistics, 95(2), 347-361.

Henrekson, M., & Johansson, D. (2010). Gazelles as job creators: A survey and interpretation of the evidence. Small Business Economics, 35(2), 227-244.

Honig, B. (1998). What determines success? Examining the human, financial, and social capital of Jamaican microentrepreneurs. Journal of Business Venturing, 13(5), 371-394.

Kohler, G. (2012). Access to infrastructure and investment: The impact on micro and small enterprises in low-income countries. World Development, 40(12), 2461-2475.

Kraemer-Mbula, E., & Wamae, W. (2012). The informal sector and the challenges of development in South Africa. In Informal Sector and Development in Africa (pp. 71-86). Cambridge Scholars Publishing.

Leff, N. H. (2014). Entrepreneurship and economic development: Theory, evidence, and policy. In S. C. Parker (Ed.), The Routledge Companion to Entrepreneurship (pp. 22-43). Routledge.

Malik, A. S., & Temple, J. R. (2009). The geography of output volatility. Journal of Development Economics, 90(2), 163-178.

Mansfield, E., Schwartz, M., & Wagner, S. (1981). Imitation costs and patents: An empirical study. The Economic Journal, 91(364), 907-918.

Milner, C., & Reed, G. (2017). Economic shocks and civil conflict: A comment. Journal of Peace Research, 54(2), 331-337.

Morgan, W., Sadler-Smith, E., & Smith, P. (2017). The micro-foundations of entrepreneurship: A review and research agenda. International Small Business Journal, 35(7), 779-796.

Naudé, W. (2010). Entrepreneurship, developing countries, and development economics: New approaches and insights. Small Business Economics, 34(1), 1-12.

OECD. (2017). Financing SMEs and entrepreneurs 2017: An OECD scoreboard. OECD Publishing.

Parker, S. C. (2009). The economics of entrepreneurship. Cambridge University Press.

International Finance Corporation (IFC). (2020). Supporting Small and Medium Enterprises (SMEs) during COVID-19. https://www.ifc.org/wps/wcm/connect/topics_ext_content/ifc_external_corporate_site/sme+finance/resources/covid19-support-sme

Storey, D. J. (2011). Entrepreneurship, small and medium-sized enterprises and public policies. The Oxford Handbook of Entrepreneurship, 15(1), 771-788.

UNCTAD. (2017). Economic development in Africa: Entrepreneurship for transformation. United Nations.

van Gelderen, M., Thurik, R., & Bosma, N. (2005). Success and risk factors in the pre-startup phase. Small Business Economics, 24(4), 365-380.

Welter, F., & Smallbone, D. (2011). Entrepreneurship and enterprise development in low-income communities. Entrepreneurship & Regional Development, 23(3-4), 183-196.

Wennekers, S., Thurik, R., & van Stel, A. (2005). Entrepreneurship and economic growth: Evidence from 23 OECD countries. The European Journal of Law and Economics, 19(3), 295-314.

World Bank. (2019). World Development Report 2019: The changing nature of work. World Bank.

World Bank. (2020). Small and medium enterprises finance. https://www.worldbank.org/en/topic/smefinance