HOW DO ENTREPRENEURS FEEL BANKRUPTCY?

Khan, K.A., Dankiewicz, R., Kliuchnikava, Y., & Oláh, J. (2020). How Do Entrepreneurs Feel Bankruptcy? International Journal of Entrepreneurial Knowledge, 8(1), 89-101. doi: 10.37335/ijek.v8i1.103

  • Khurram Ajaz Khan Faculty of Management and Economics, Tomas Bata University in Zlin, Czech Republic https://orcid.org/0000-0001-5728-8955
  • Robert Dankiewicz Department of Finance, Banking and Accountancy, Faculty of Management Rzeszow University of Technology, Rzeszow, Poland
  • Yana Kliuchnikava Department of Economics, Faculty of Management and Economics, Tomas Bata University in Zlin, Czech Republic
  • Judit Oláh nstitute of Applied Informatics and Logistics, Faculty of Economics and Business, University of Debrecen, Hungary
Keywords: Bankruptcy, SMEs, ris management, entrepreneurs, experience with bankruptcy

Abstract

Bankruptcy risk is always a constant threat to the SMEs, which determines how long the firms will survive. Since its identification, management, and control vested in the hands of the entrepreneurs and managers. A lot depends on their interpretations and beliefs. Therefore, to investigate this phenomenon, the present study aimed to investigate the attitude of the managers and entrepreneurs towards bankruptcy risk and to draw the conclusion on how the entrepreneurs’ attitude differs among the Czech Republic and Slovak republic entrepreneurs as well. The study was conducted among 822 small and medium-sized companies from the Czech Republic and Slovakia. Chi-square and z-score test methods were used to test for the existence of a statistically significant difference between bankruptcy attitudes among Czech and Slovak entrepreneurs. Slovak entrepreneurs are more likely to regard bankruptcy as a natural part of the business, and they are less likely to identify an entrepreneur’s mistake as the cause of bankruptcy. An important conclusion is that the experience of bankruptcy for entrepreneurs of both countries is assessed as a vital experience gained, which, however, negatively affects the self-esteem of an entrepreneur. This study contributes to the literature by offering insights over the attitude of SMEs’ owners and entrepreneurs about bankruptcy risk in the context of the Czech Republic and the Slovak republic. From the policymakers’ viewpoint, it is imperative to understand the attitude of SMEs’ owners and entrepreneurs to design effective policies aiming to improve entrepreneurs with adequate skills, ability, and state support. The Originality of the paper deals with the entrepreneur’s perception, behaviour, and attitude towards bankruptcy risk in SMEs.

Author Biographies

Khurram Ajaz Khan, Faculty of Management and Economics, Tomas Bata University in Zlin, Czech Republic

Khurram Ajaz Khan, PhD Student

Department of Business Administration, Faculty of Management and Economics, Tomas Bata University in Zlin, Mostní 5139, Zlin 760 01, Czech Republic, E-mail: khan@utb.cz, ORCID: https://orcid.org/0000-0001-5728-8955. He is pursuing PhD in management and economic and his area of interest is, Individuals' Behavior, financial literacy, financial capability, SMEs, and business environment.

Robert Dankiewicz, Department of Finance, Banking and Accountancy, Faculty of Management Rzeszow University of Technology, Rzeszow, Poland

Robert Dankiewicz PhD, Prof. PRz

Department of Finance, Banking, and Accountancy, Faculty of Management Rzeszow University of Technology, Al. Powstańców Warszawy 10, 35-959 Rzeszow, Poland, E-mail: robertdankiewicz@wp.pl, ORCID: https://orcid.org/0000-0003-3453-2892. Area of interest: risk management in business operations, insurance, in particular, credit insurance, bankruptcy

Yana Kliuchnikava, Department of Economics, Faculty of Management and Economics, Tomas Bata University in Zlin, Czech Republic

Yana Kliuchnikava, PhD Student

Department of Economics, Faculty of Management and Economics, Tomas Bata University in Zlin, Mostní 5139, Zlin 760 01, Czech Republic, E-mail: kliuchnikava@utb.cz, ORCID: https://orcid.org/000-0002-0156-7506. Area of interest: business risks, SMEs, business environment and financial stability of enterprises, financial risks.

Judit Oláh, nstitute of Applied Informatics and Logistics, Faculty of Economics and Business, University of Debrecen, Hungary

Judit Oláh, Associate Professor

Institute of Applied Informatics and Logistics, Faculty of Economics and Business, University of Debrecen, Egyetem tér 1, 4032, Debrecen, Hungary, E-mail: olah.judit@econ.unideb.hu, ORCID: https://orcid.org/0000-0003-2247-171. Area of interest: risk management, food supply chain, bioenergy, logistics, Industry 4.0.

Published
2020-06-30