A Quantitative Measure of the Effects of IT Investment on the Risk of Bankruptcy in Small and Medium-Sized Companies

Abstract

This paper examines the relation between the competitiveness of SMEs, i.e. their ability to survive, and the characteristics of their ICT investments: it provides evidence that some factors (such as the development of decentralised organizational structures, or the use of Internet resources) appear to be related to better financial health and, consequently, with a better chance of survival. By applying multivariate statistical methods we obtain quantitative measures of the intensity of these relations, as well as of the relative risk associated with each characteristic of the information system.

Keywords: IT investments, financial bankruptcy forecast, intangibles

JEL Classification: G33, G31, O32