The hazards of small firms in Southern Africa

Abstract

Small enterprises are a ubiquitous feature of the economies of many developing countries. This study is the first to examine the duration of their survival using economic theory and modern econometric techniques. Using data sets from surveys conducted in four southern African countries, I estimate a proportional hazards model describing the closure rates of a sample of approximately 21,000 firms. There is an inverse relationship between enterprise growth rates and the closure hazard. The sector where it operates influences the hazard, as does its location. In some countries female‐headed firms are at a survival disadvantage compared to their male counterparts.