Measurement of SME risk and its relationship with SME operating characteristics: An empirical study in Malaysia
type: CreativeWork
description: SMEs are inherently risky organisations reflected in high birth and death rates in many countries. This risk of failure is exacerbated by the financial and operational opacity of SMEs, which hamper efforts by authorities and investors to evaluate and value objectively SMEs. Despite a wide spread view that SMEs are risky there is little evidence of generalizable, empirical estimates SME risk and supporting analyses, covering the relationship between operational characteristics risk. Commencing from a premise that there needs to be a robust framework for quantifying SME risk this research examines, using a Malaysian database, risk measures and their relationship to observable attributes of SMEs. The work is important for a range of stakeholders, including government in relation to sustainable economic growth goals and other areas of public policy. Investors, customers, suppliers, employees and society are unlikely to benefit from business churn where some of it is avoidable. Malaysia, one of the larger economies in Southeast Asia (by GDP) is a multi-cultural country with a diversity of ethnicities. In the 1990s, it, along with various other East Asian countries underwent an economic boom that subsided with the onset of the Asian financial crisis in 1998. It is a constitutional monarchy with members of the royal Malay families assuming the role, in rotation, of Head of State. Given its diverse demographic, Malaysia actively practices an affirmative action scheme designed to give indigenous people (the Bumiputera) better access to finance, education and business opportunities to promote greater economic parity across the different ethnicities living in the country. Islam is the State religion with close to 60% of the population practicing the religion. As such, Islamic finance is widely available and has come to characterise Malaysian fiscal policy as being very conservative and risk-averse in accordance with Islamic principles. SMEs in Malaysia are predominantly family…
abstract: SMEs are inherently risky organisations reflected in high birth and death rates in many countries. This risk of failure is exacerbated by the financial and operational opacity of SMEs, which hamper efforts by authorities and investors to evaluate and value objectively SMEs. Despite a wide spread view that SMEs are risky there is little evidence of generalizable, empirical estimates SME risk and supporting analyses, covering the relationship between operational characteristics risk. Commencing from a premise that there needs to be a robust framework for quantifying SME risk this research examines, using a Malaysian database, risk measures and their relationship to observable attributes of SMEs. The work is important for a range of stakeholders, including government in relation to sustainable economic growth goals and other areas of public policy. Investors, customers, suppliers, employees and society are unlikely to benefit from business churn where some of it is avoidable. Malaysia, one of the larger economies in Southeast Asia (by GDP) is a multi-cultural country with a diversity of ethnicities. In the 1990s, it, along with various other East Asian countries underwent an economic boom that subsided with the onset of the Asian financial crisis in 1998. It is a constitutional monarchy with members of the royal Malay families assuming the role, in rotation, of Head of State. Given its diverse demographic, Malaysia actively practices an affirmative action scheme designed to give indigenous people (the Bumiputera) better access to finance, education and business opportunities to promote greater economic parity across the different ethnicities living in the country. Islam is the State religion with close to 60% of the population practicing the religion. As such, Islamic finance is widely available and has come to characterise Malaysian fiscal policy as being very conservative and risk-averse in accordance with Islamic principles. SMEs in Malaysia are predominantly family…
author: Harith, Samir
keywords: Finance, SME, Beta, SME Survival, Risk, Measurement, pure-play beta, accounting beta
license: https://researchcommons.waikato.ac.nz/bitstreams/5dc74dc8-914e-43c5-9a9d-0272bad25a2d/download
date published: 2018
date modified: 2026-07-24T05:57:46Z
provider: University Waikato
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: The University of Waikato