Growth through the Increase of Locations: An MSEs’ Predictive Model

Abstract

The importance of micro and small enterprises (MSEs) is widely recognized. Getting a deeper analysis regarding the factors that increase the probability for survival and stability should be a matter of increasing interest. This research includes databases from three different national-coverage income and expenses surveys in a 6-year period, one of them after the months of the longest period of businesses’ lockdown in Mexico because of COVID-19. The methodology utilizes a Logit model. From the 900 variables, this study identifies 6 main variables. The predictive model results shows an approximately 70% probability to categorize MSEs in the group having at least one location operating outside their own dwelling. Keeping accounting records, using external accountants, and belonging to higher socioeconomic levels have a positive effect on growing the business. Self-consumption has a negative effect. No particular effects on the factors of influence on the stability of MSEs derived from COVID-19.