| This dissertation provides insights into definitional issues of small business owner-managers and which factors affect their financial vulnerability. In particular, the primary purposes of this dissertation are to: (1) provide a thorough review of the extensive literature on definitional issues of small businesses and their owners; (2) suggest more complete classifications of small businesses and new measures of financial vulnerability that are suitable for households who own or manage a small business; and (3) examine factors affecting the level of financial vulnerability of small business owner-manager households, based on three major aspects of household financial status: assets, income, and financial burden.;This dissertation analyzes the factors affecting financial vulnerability of small business owner-managers using the 1992 to 2007 Surveys of Consumer Finances. The financial vulnerability of the owner-managers is measured by three financial ratios: the business asset ratio (BAR), the business income ratio (BIR), and the financial obligations ratio (FOR). This dissertation defines the business asset ratio (BAR) as the ratio of business assets to total household assets, the business income ratio (BIR) as the ratio of business income to total household income, and the financial obligations ratio (FOR) as the ratio of monthly household financial obligations to monthly household pre-tax income. These three ratios provide a measure of the level of diversification in assets, a measure of the level of diversification in household income, and a measure of the level of financial burdens, respectively. The factors to be tested are divided into three sub-categories: social-demographic factors, economic status factors, and attitudinal/expectation factors.;Using ordinary least square (OLS) regression models and a logistic regression (Logit) model, this dissertation tests the effects of those factors on financial vulnerability and finds that several common factors such as household type, education attainment, self-employment status, home-ownership, income and net worth, and health insurance coverage are significantly related to financial vulnerability. In particular, household types, self-employment status, and health insurance coverage have statistically significant and have consistent effects on financial vulnerability in all three regression models. Compared to married households, single headed small business owner-managers are more likely to be financially vulnerable. Small business owner-managers with self-employment status are also more likely to be financially vulnerable, compared to those with other types of employment status such as salary earners, retirees, and unemployed. On the other hand, uninsured small business owner-managers tend to be less financially vulnerable. |
