Title: Management practices in micro and small enterprises: the relationships between practices adopted and funding

Authors: Juliana Gonçalves De Araújo; Umbelina Cravo Texeira Lagioia; Aldemar De Araújo Santos; Rodrigo Vicente Dos Prazeres

Addresses: PROPAD/UFPE, Av. dos Reitores s/n – Cidade Universitária, PE, Brazil ' UFPE, Av. dos Reitores s/n – Cidade Universitária, PE, Brazil ' UFPE, Av. dos Reitores s/n – Cidade Universitária, PE, Brazil ' PPGCC/UFPE, Av. dos Reitores s/n – Cidade Universitária, PE, Brazil

Abstract: This paper aims to analyse the relationships between management accounting practices and sources of financing. Data were collected from a survey questioning the profiles, the sources of financing and the management practices adopted by 52 small business in a textile cluster. It could be observed that 38.5% of the firms were initially fund-raised by family resources and that 42.3% resorted to the personal funds of the owner. As for resources used to maintain the business, 34% of the respondents answered that it was obtained from banks and 21.2% told that it came from their own resources. Through U Mann-Whitney test, it was found that sources of resources of family origin indicated significant negative associations with management and control practices. A different behaviour was detected when resources came from personal funds and debt capital: relationships between management practices and debt capital present themselves positively, indicating that obtaining credit from these sources is associated with increased use of tools.

Keywords: management practices; costs; small business funding; small firms; micro enterprises; textile clusters; funding sources; sources of finance; debt capital; family financing.

DOI: 10.1504/IJMDA.2016.081090

International Journal of Multivariate Data Analysis, 2016 Vol.1 No.1, pp.76 - 95

Received: 05 Aug 2016
Accepted: 04 Oct 2016
Published online: 20 Dec 2016 *