Exploring the entrepreneurial role in determining the liquidity of the Australian small and medium-sized enterprises (SMEs) across industries

The purpose of this paper is to explore the entrepreneurial role determining the liquidity of Australian small and medium-sized enterprises' (SMEs) across industries. Literature in the area of SME liquidity is limited and further research is needed to obtain a better picture of SME liquidity in Australia. This paper reports on an empirical study based upon a one period (1997-98) sample from the Australian Bureau of Statistics (ABS) Business Longitudinal Survey (BLS). Regression analyses were undertaken on both financial and non-financial variables to identify the determinants of SME liquidity for Australian businesses. Analyses of the results of the BLS data indicate that financial variables appear to be more important than non-financial ones and that SME liquidity varies depending on the industry in which the business operates. There also appear to be major differences between SMEs' liquidity depending on the size of the business. The results of this study have implications for both future research and policy makers.