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Family Hardship and the Growth of Micro and Small Firms in Indonesia

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  • Rasyad A. Parinduri

Abstract

I examine what happens to the total assets of micro and small firms in Indonesia when their owners experience hardship such as the death or sickness of family members, crop losses, or natural disasters. Using a representative sample of firm owners, I find that deaths of family members reduce the assets of such firms, that the adverse effects of these are long-lasting and economically large, and that the smaller the firms the greater the magnitude of these effects. There is no evidence, however, that the sickness of family members, crop losses, or natural disasters reduce firms' assets. These results suggest that only severe family hardship impedes the growth of micro and small firms.

Suggested Citation

  • Rasyad A. Parinduri, 2014. "Family Hardship and the Growth of Micro and Small Firms in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 50(1), pages 53-73, April.
    • Handle: RePEc:taf:bindes:v:50:y:2014:i:1:p:53-73
    DOI: 10.1080/00074918.2014.896237
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    Cited by:

    1. Lau, Siew Yee & Parinduri, Rasyad & Lee, Yoong Hon, 2019. "Does Social Health Insurance Help Owners of Micro- and Small Firms Cope with Family Hardships? Evidence from Indonesia," MPRA Paper 95295, University Library of Munich, Germany.
    2. Santoso, Rokhedi Priyo & Sriyana, Jaka, 2020. "The Effect of Idiosyncratic Shocks on Labor Market Outcomes of Informal Households in Indonesia," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(2), pages 13-27.
    3. Aloysius Gunadi Brata & Henri L. F. De Groot & Wouter Zant, 2018. "Shaking up the Firm Survival: Evidence from Yogyakarta (Indonesia)," Economies, MDPI, vol. 6(2), pages 1-14, April.
    4. Falentina, Anna T. & Resosudarmo, Budy P., 2019. "The impact of blackouts on the performance of micro and small enterprises: Evidence from Indonesia," World Development, Elsevier, vol. 124(C), pages 1-1.
    5. Esa A. Asyahid & Elan Satriawan, 2024. "The Nature of Self-Employment in Indonesia: Entrepreneurship or Survival Strategy?," Gadjah Mada Economics Working Paper Series 202403002, Department of Economics, Faculty of Economics and Business, Universitas Gadjah Mada.

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    More about this item

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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