Transformations  in
Business & Economics

THE INSOLVENCY OF SMES WITHIN THE PERSPECTIVE OF THE CENTRAL EUROPEAN REGION
Aleksandr Kljucnikov, Monika Sobekova-Majkova, Zuzana Vincurova, Migle Sarvutyte-Gailiuniene, Ilona Kiausiene

ABSTRACT. Low liquidity and the insolvency are the problems that are bothering approximately one third of the companies in the Central Europe. The insolvency of the company is mostly evoked either by the internal reasons, including the influence of the strategic and/or operational business risks, or by the violation of the payment obligations by its business partners. The aim of this paper is to observe the impact of the specific factors, including firm's size and location, the age and the gender of the entrepreneur on the company's ability to manage the accounts payable and accounts receivable in a timely manner to avoid potential insolvency. A partial aim of the paper is focused on the identification to what extent the problems with the payment discipline of the customers influence the occurrence of insolvency of the company. The results are based on the survey carried out among 438 Slovak SMEs in 2016. The data were analysed by the methods of descriptive statistics, the Pearson's chi-square analysis and the regression analysis. The results of the research confirm, that the size of the company and the owner's gender, the firm size and the gender do have an impact on the ability to pay accounts payable on time. The regression analysis discovered an existence of the statistically significant linear relationship between the solvency problems of SMEs and the payment discipline of their customers, while the final model may explain up to 73.66% of the variability of payments problems in the segment of SMEs in Slovakia.

KEYWORDS:  primary insolvency, secondary insolvency, defaulters, accounts payable, accounts receivable, payment discipline, Slovakia.

JEL classification:  G11, G32, L26, M21.