Modeling and Analysis of Business Failures: Application to Moroccan SMEs

Lamia Jamel^{1, 2,} , Meriem Jouirou³, Monia Ben Ltaifa⁴ and Raied Al Harbi⁵

¹Department of Economic, College of Business Administration, Taibah University, Medinah, Saudi Arabia

²Department of Economic, Faculty of Economic Sciences and Management of Sousse, Sousse University, Sousse, Tunisia

³Department Finance, Higher Institute of Informatics and Management of Kairouan, Kairouan University, Kairouan, Tunisia

⁴Department of Economic, Faculty of Economic Sciences and Management of Sfax, Sfax University, Sfax, Tunisia

⁵Department of Finance, Community College, Taibah University, Medinah, Saudi Arabia

Cite this paper:
Lamia Jamel, Meriem Jouirou, Monia Ben Ltaifa and Raied Al Harbi. Modeling and Analysis of Business Failures: Application to Moroccan SMEs. International Journal of Business and Risk Management. 2019; 2(1):19-26. doi: 10.12691/ijbrm-2-1-4

Abstract

Business failure is undoubtedly one of the most raised issues in the field of business management. Small and medium-sized enterprises (SMEs) play an important economic role in many countries, especially in developing countries. In Morocco, for example, they make up more than 90% of Moroccan companies and contribute around 50% to job creation and considerably to value-added. But despite this, most of them are at risk of default and there is very little research and empirical research on this topic in Morocco, as in many developing countries. This work aims to contribute to the understanding of the determinants of business failure using the chi-square independence test. The goal is to explain but also to explain a methodology that can be applied to explain business failures by determining their internal factors. Our empirical results seem to support the claim that the main cause of such failures lies in the absence of a strategic vision and managerial knowledge and culture among SME managers.

Keywords:
SME failure chi-square test Gharb Chrarda Beni Hssen Kenitra province

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

References:

[1]	DIADJIRY COULIBALY., A. (2004). La défaillance des PME belges: Analyse des déterminants et modélisation statistique. Thèses de l'Université catholique de Louvain (UCL), Edition Presses universitaires de Louvain.
[2]	BESCOS, P.L. (1989), Défaillance et redressement des P.M.I : Recherche des indices et des causes de défaillance, Cahier de Recherche du CEREG, 8701, Université de Paris-Dauphine, 1987.
[3]	BEN JABEUR., S. (2011), Statut de la faillite en théorie financière : approches théoriques et validations empiriques dans le contexte français, Doctorat en sciences de gestion, Université du Sud-Toulon-Var; Université de Sousse.
[4]	KEASY, K., P. McGUINNESS (1990). The failure of UK industrial firms for the period 1976-1984: logistic analysis and entropy measures, Journal of Business Finance & Accounting, Volume 17, Issue 1, pages 119-135.
[5]	AMOR, S. BEN ; KHOURY, N.; SAVOR, M. (2009). Modèle prévisionnel de la défaillance des PME québécoises emprunteuses. Journal of Small Business and Entrepreneurship.
[6]	FITZPATRICK P, J. (1932), A Comparison of Ratios of Successful Industrial Enterprises with Those of Failed Firms, Certified Public Accountant, 12, 598-605, 656-662, 727-731.
[7]	CRUTZEN, N., & VAN CAILLIE, D. (2010). A Taxonomy of Distinctive Explanatory Business Failure Patterns amongst Small Firms : A Qualitative Approach. Cahier de Recherche du CEPE.
[8]	NEWTON, G.W. (1985). “Bankruptcy and Insolvency Accounting”, John Wiley and Sons, 3rd Edition, New York, 790p.
[9]	MARTINET, A.C. (1988), Diagnostic stratégique, Vuibert.
[10]	LAITINEN, E.K. (1991), Financial ratios and different failure processes, Journal of Business Finance and Accounting, 18(5), 649-673.
[11]	GERARD, P.; WINDEY, J.; G REGOIRE, M. (1998): "Le Concordat judiciaire et la faillite - Lois des 17 juillet Et 8 Août 1997", Les Dossiers du journal des tribunaux, Editions De Boeck Et Larcier, Bruxelles, 221p.
[12]	BACK, B. LAITINEN, T. SERE, K. WEZEL, M.V. (1996), Choosing bankruptcy predictors using discriminant analysis, Logit analysis and Genetic Algorithms, Turku Center for Computer Sience, Technical Report, 40, 1-18.
[13]	ARGENTI, J. (1976), Corporate collapse: the causes and symptoms, Holsted press, McGraw-Hill, London, 1st Edition.
[14]	OOGHE, H., VAN WYMEERSCH, C. (1986), Modèles prévisionnels de la faillite, Revue de la Faculté de droit de l’Université de Liège, n° 3, pp. 183-195.
[15]	MARCO, L. (1989), Faillites et crises économiques en France au XIXème siècle », Annales Economies, Sociétés, Civilisations, 44ème année, n°2, pp. 355-378.
[16]	CRUTZEN, N. (2006): “Les modèles dynamiques représentatifs de la défaillance de l’entreprise : un état des théories en présence dans la littérature”, Working paper rédigé et Présenté en vue de l’obtention du Diplôme d’Etudes Approfondies, HEC-Ecole de Gestion de l’Université de Liège, Juin 2006.
[17]	MATOUSSI, H. MOUELHI, R. SALAH, S. (2011), La prédiction de faillite des entreprises tunisiennes par la régression logistique. 20ème congrès de L'AFC, Mai 1999, France. <halshs-00587769> - Document en ligne consulté le 31-03-2015 https://hal.archives-ouvertes.fr/halshs-00587769/document
[18]	BRILMAN, J. (1982), Le redressement d’entreprises en difficultés, Editions Hommes et Techniques.
[19]	KOENIG, G. (1985), Entreprises en difficultés: des symptômes aux remèdes, Revue Française de Gestion, Janvier-Février, pp. 84-92.
[20]	JAMINON, R. (1986), Facteurs explicatifs de faillites, Revue de la Faculté de Droit de l’Université de Liège, n°3, pp. 197-207.
[21]	DAUBIE., M, MESKENS., N. 2001. Business Failure Prediction: A Review and Analysis of the Literature, not published, p.1-15.
[22]	SHEPPARD, J.P. (1994). Strategy and Bankruptcy: An Exploration Into Organizational Death, Journal of Management, Vol. 20, No 4, 795-833.
[23]	OOGHE, H.; WAEYAERT, N. (2004): “Oorzaken van faling en falingspaden: Literatuur Overzicht en conceptueel verklarings mode l”, Economisch en Sociaal Tijdschrift, Vol. 57, n° 4, pp. 367-393.