Resources and Failure of SMEs: Another Look.
Vol. Volume 19, Number 1 March/2014
Densil A. Williams
Failure among SMEs has been attributed to being small, young, located in rural areas, come from particular industries and not part of a network. These determinants if used as surrogates for resources, suggest that firms that lack resources are more susceptible to failure. Using the resources-based view of the firm, this paper aims to do a post-mortem examination on the attributes of failed SMEs by analyzing data of more than 13,000 failed firms in the UK between 1999-2009. The findings reveal that failure is not merely a function of lack of resources. While these findings shed new light on attributes of failed SMEs, there are still some limitations to the work that must be taken into consideration when applying the results.
Failure, Resource-Based View, Profitability, SMEs.