A behavioral view of SME product termination decisions

Drawing from the attention-based view of the firm, we argue that heuristics play a prominent role in product termination decisions in SMEs. Specifically, we predict that performance below aspiration is a significant heuristic used in these decisions. We deepen our examination by developing moderating hypotheses to better understand heterogeneity across SMEs. Attention regulators hypothesized to moderate the main effect include regulatory uncertainty, predisposition toward satisficing behavior in the firm, whether the firm is run by an owner-manager, and the extent to which the firm faces liquidity constraints. Hypotheses are tested with survey data of over 4,000 SMEs from 34 countries.