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Factors explaining the business survival of MSMEs in Ecuador

Abstract:

This research estimates the determinants of the probability of business survival of micro, small and medium enterprises in Ecuador using a probit model with data provided by the Superintendence of Companies, Securities and Insurance in the period 2014-2016. Among the results of the research we find that size and age are inversely related to business survival. In addition, increasing equity, maintaining an optimal portfolio turnover and accessing balanced indebtedness increase the life expectancy of companies. Finally, the Sierra region is more conducive to survival, as are the Transport and Construction sectors.