Reasons for the death of small firms

Failures of firms led by women are linked to illness and family reasons

David Mckenzie has a good post on the reasons for the death of small firms in developing countries. He summarises the results into three categories.
  1. Most common reason for firm death is that less profitable and less productive firms end up making losses and closing.
  2. Firms, largely run by more educated owners, close because better opportunities arise for the owner.
  3. Small firms, particularly those run by women, close because of illness and family reasons.
The last one is an interesting fact. Firms led by women close because of family reasons. I suspect there’s some underlying sociological reason to this pattern. It’s an interesting area to be explored:
  1. Is this because women bear the additional burden of taking care of the household activities in traditional societies, that their businesses are more likely to get affected when family work load increases?
  2. Is it because women are more likely to divert their business resources to family, should a need arise?

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