Cash flow; Financial constraints; Investment behavior; Personal capital; small business
This article aims to tell the “gamble of resurrection” story for small owner-managed firms. Analyzing a set of private firms in Vietnam, we find that for firms that are less financially constrained, an increase in the degree of financing constraints leads to a decrease in the use of entrepreneurs’ personal capital. However, once critical value of constraints is reached, this relationship reverses. Specifically, deferring investments that would otherwise be in time may result in firms’ experiencing such serious financial distress that the entrepreneurs will invest their personal capital to try and maintain their firms’ survival even though it may be too late.