Survival Analysis of Small Informal Businesses in South Africa, 2007–2010

Abstract

Annual surveys were conducted among a small business panel of 300 businesses during the four-year period 2007 to 2010 aimed at examining small business survival and mortality. By contrasting the profiles of successful businesses with those that closed their doors, a second objective was also attained, namely the identification of principle reasons for small business survival and sustainability. The survey data were applied in a categorical regression model with business survival as dependent variable and several independent variables related to competitive environment, entrepreneurial endowment and comparative advantages as independent variables. The analysis identified the human factor in small businesses and specifically entrepreneurial actions and business management skills as the strongest predictors of small business survival. Businesses portraying these characteristics should be the focus of small business support strategies.