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The impact of crime on the performance of small and medium-sized enterprises

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  • Victor Motta

    (Pennsylvania State University, USA)

Abstract

Small and medium-sized enterprises (SMEs) are in the forefront of economic policy in developing economies, playing critical role in local economic growth and development. SMEs tend to serve local rather than global markets. However, several obstacles prevent greater participation of SMEs in the economy. Among them, crime is a major issue that negatively affects local development in developing countries, as robbery, theft, vandalism and arson increase the cost of doing business. The purpose of this study is to investigate the relationship between crime and firm performance for Latin American SMEs in both service and hospitality sectors, using labor productivity as a measure of firm performance. Labor productivity is a key concern in Latin America as institution-related issues of corruption, infrastructure, regulations, trade policies, access to finance, and human capital may reduce the efficiency of firms in developing economies. The overall findings suggest that there is a negative relationship between criminal activity and firm performance for SMEs in Latin America.

Suggested Citation

  • Victor Motta, 2017. "The impact of crime on the performance of small and medium-sized enterprises," Tourism Economics, , vol. 23(5), pages 993-1010, August.
    • Handle: RePEc:sae:toueco:v:23:y:2017:i:5:p:993-1010
    DOI: 10.1177/1354816616657940
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    Cited by:

    1. Yang Yang & Nan Hua, 2022. "Does hotel class moderate the impact of crime on operating performance?," Tourism Economics, , vol. 28(1), pages 44-61, February.

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