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Survival Likelihood of Micro and Small Businesses Facing a Catastrophe

2021 , Dávila-Aragón, Griselda , Rivas Aceves, Salvador , Ramírez Pérez, Héctor Xavier

This chapter proposes a measurement methodology throughout a Bayesian Network to quantify the survival probability of micro and small enterprises (MSEs) facing a catastrophic event, and to assess if a Business Continuity Plan (BCP) is a unique alternative to prevent companies from bankruptcy. Empirical evidence for a developing country shows the majority of companies are MSEs and without enough knowledge about a BCP; therefore, the likelihood of businesses’ survival will depend on BCP and several other elements that should be taken into account for owners when making decisions towards negative effects of catastrophic events. Results showed that for MSEs businesses with high face-to-face customer interaction, a BCP might be useful as well as the experience in crisis of the management team, but not as the only variable.

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Contagion Adverse Degree, Income Inequality and Economic Growth

2021 , Rivas Aceves, Salvador

By introducing the effects of the pandemic into an endogenous economic growth model, with a financial system, among human, physical and financial capitals, diminishing returns, constant scale effects and heterogenic agents, the impact by the contagion adverse degree in households is modelled. Results are: a) contagion adverse degree affects intertemporal marginal substitution rate of households and production process for industry; b) short and long run economic growth rate are also affected by the contagion adverse degree of households; c) human capital growth rate and distribution dynamics relies on contagion adverse degree as well; d) in the absent of a financial system, poor households will allocate less time to leisure if they want to consume more or increase human capital or both when the contagion adverse degree is low, and viceversa; e) physical and human capital ratio of the economy relies only in one sector when there is none financial system. Consequently, economic growth rate is lower since only one sector performs production activities while having a contagion adverse degree low; f) rises in output or decreases in salary due to the contagion adverse degree lead to increases in inequality; g) inequality decreases when human capital goes up; h) physical capital generates small and positive changes in inequality; i) financial capital causes positive impacts on inequality; j) inequality decreases if total multifactorial productivity increases; k) macroeconomic equilibrium depends in negative ways because of contagion adverse degree. © Springer Nature

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The K-shape Economic Recovery and a New Company Classification

2022 , Rivas Aceves, Salvador , Maawad Morales, Mauricio

One of the main consequences the pandemic has brought is the economic recession since economic activities have been affected and, as a final result, companies have gone bankrupt and unemployment has increased. Specific negative impacts occur according to the economic activity type a company carries out, mainly due to face-to-face interaction intensity with economic agents. Companies that were able to innovate their production and distribution processes not only endured the pandemic but also grew. Companies that were not able to innovate stopped growing or, even worse, shrunk or went bankrupt. The research objective is to show that both economic recession and recovery alike are creating a broader two-sector classification based on the physical interaction intensity among economic activities. In order to do so, the link between economic recovery and business bankruptcy is performed by considering the economy sectors for European and North American regions; in particular, 14 European countries, Canada, the United States and Mexico were the studied economies. Findings show that face-to-face interaction is a main factor for some economic activities to decline; hence, business bankruptcy is related to that interaction so the K-shape economic recovery is created. Consequently, the pandemic has brought a new classification for companies. © 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.

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Innovation and internationalization : Grupo Lorsa : A family firm that found innovation from within

2018 , Ramírez Pérez, Héctor Xavier , Jimenez-Castillo, Luis , Rivas Aceves, Salvador

In 2015, Mexico and Brazil had been the countries with the highest growth rates, reaching a gross domestic product (GDP) of USD$1.21 and US$2.3 trillion respectively, versus other countries such as Argentina, Chile, and Peru. During the first forty years, the main business in Lorsa consisted of selling equipment for laundries and dry-cleaners. The first attempt of the company started in 1953 in Guadalajara by its founder Luis Ousset, an entrepreneur who had worked as an employee and independent advisor in the dry-cleaning sector in Guadalajara and Mexico City for eleven years before starting his own business. He got married in 1951, and had seven children. The children were involved in the company since a young age. Even though all four sons were working in the company, it seemed that the first successor was going to be Luis Jr. He was in charge of key accounts for Lorsa and was the most important sales agent. © 2019 Taylor & Francis.