Cuadernos de Administración
Print version ISSN 0120-3592
ARIAS SANDOVAL, Alberto and QUIROGA MARIN, Raúl Fernando. SME shutdowns in the metropolitan area of Cali (2000 - 2004): an analysis of company survival. Cuad. Adm. [online]. 2008, vol.21, n.35, pp. 249-277. ISSN 0120-3592.
Small and medium-sized enterprises (SMEs) participate significantly in an economys production and employment but they have high mortality rates. That situation makes it relevant to analyze the possible causes for their premature shutdown. Said causes may be firm-related variables, such as initial size, profitability, and indebtedness, or they may be variables related to the microeconomic environment of the firm, such as average growth of the economic sector in which the company competes and the companys geographic location. This article analyzes the micro environment that leads to the best company survival, using a sample of companies in the metropolitan area of Cali (CMA) from 2000 to 2004. Duration models are used for data analysis, such as the proportionate risk model (also called the Cox model) and the Kaplan-Meier model. Results show evidence that the initial size of the company, its financial profitability, the economic activity sector, and its geographic location have a significant positive impact and that there is an inverse relation between indebtedness and company survival.
Keywords : Survival analysis; company shutdown; company dynamics; company entry and exit; the Cox model; the Kaplan-Meier model.