ABSTRACT

This study investigates the causes or predictors of SMEs’ failure in Cambodian. The study uses logistic regression to analyze 90 successful and 42 unhealthy small businesses. The results of the study find that five variables (working capital, owner’s education level, owner’s marketing skills, customer complaint and age of the business) were significant in predicting small businesses success or failure. The model also predicted 97% of the businesses accurately with a high R-square value of 66%. This study is the first to predict success versus failure factors of SMEs conducted in Cambodia that contributes to theory and practice. Implications for future and current entrepreneurs; government agencies that train, advice and assist small business owners; public policy makers; educators; suppliers; and lenders are presented.

Keywords: business failure, business success, logistic regression, small business, resource based theory

JEL Codes: G30, G39