Failure Factors in MSMEs in Mexico Evidenced by COVID-2019

ABSTRACT

Before the pandemic, the economic development of Micro, Small and Medium-sized Enterprises (MSME) in Latin America showed gradual signs of recovery after the problems that occurred in years 2009 and 2016. As of 2017, Mexico maintained a growing inflation of 5% on average, the price of energy increased 20%, an external debt growth of 12% and a GDP lesser than 1.6% per year (Banco Mundial, 2020), (OCDE, 2019), (INEGI, 2018). By the end of 2019, SARS-CoV-2 (COVID - 2019) evidenced failure factors that exacerbated the permanence of MSMEs, since closed more than 30.6% of them (Naciones Unidas, 2021). In this research, these factors are discussed, by compiling information on economic behavior, and quantitative studies of the commercial, manufacturing and services sectors. To identify these factors, 246 Mexican MSMEs that closed between September 2019 and December 2020 were selected using stratified random sampling. The results showed failure factors associated with the capabilities of the administrator and internal aspects of the company, among which the lack of vision to identify new businesses and little knowledge of Information Technology stand out. © 2023 Russell Sage Foundation. Lewis-McCoy, R. L'Heureux, Natasha Warikoo, Stephen A. Matthews, and Nadirah Farah Foley. 2023.