Financial distress, employees’ welfare and entrepreneurship among SMEs

John Nkwoma Inekwe*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)


The study predicts ex-ante financial distress in small and medium-sized enterprises (SMEs) and examines its significance in entrepreneurial activity. Thus, the study provides the dynamic characterization of the link between financial distress, employment and the growth in the establishment of SMEs. The study further examines employees’ welfare and financial distress of SMEs. The results reveal that financial ratios and market variables are significant in predicting financial distress risks. In the wake of financial distress, the results reveal contractions in the growth of SMEs. In addition, financial distress in SMEs induces an adverse effect on the level of employment and a reduction in employees’ welfare.

Original languageEnglish
Pages (from-to)1135-1153
Number of pages19
JournalSocial Indicators Research
Issue number3
Publication statusPublished - Dec 2016
Externally publishedYes


  • entrepreneur
  • financial distress
  • clogit
  • SMEs


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