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Financial Distress, Employees’ Welfare and Entrepreneurship Among SMEs

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  • John Nkwoma Inekwe

    () (Monash University)

Abstract

Abstract The study predicts ex-ante financial distress in small and medium-sized enterprises (SMEs) and examines its significance in entrepreneurial activity. Thus, the study provides the dynamic characterization of the link between financial distress, employment and the growth in the establishment of SMEs. The study further examines employees’ welfare and financial distress of SMEs. The results reveal that financial ratios and market variables are significant in predicting financial distress risks. In the wake of financial distress, the results reveal contractions in the growth of SMEs. In addition, financial distress in SMEs induces an adverse effect on the level of employment and a reduction in employees’ welfare.

Suggested Citation

  • John Nkwoma Inekwe, 2016. "Financial Distress, Employees’ Welfare and Entrepreneurship Among SMEs," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(3), pages 1135-1153, December.
  • Handle: RePEc:spr:soinre:v:129:y:2016:i:3:d:10.1007_s11205-015-1164-6
    DOI: 10.1007/s11205-015-1164-6
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    References listed on IDEAS

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    More about this item

    Keywords

    Entrepreneur; Financial distress; Clogit; SMEs;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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