Purpose The study aims to examine financial strategies (financial assistance, building financial management capacities and sound macroeconomic management) to tackle critical factors that cause the failure of startup businesses in developing and lower-middle-income countries. Design/methodology/approach Panel data covering 2000 to 2023 (quarterly data) from 70 developing and lower-middle-income countries and the pooled mean group model are employed for the analysis. Findings The study's result indicates that the provision of financial assistance, proper financial management capacity training programmes and sound macroeconomic management help to reduce the failure of startup businesses by tackling critical factors such as lack of financial assistance, weak financial management capacity and poor macroeconomic management. Practical implications The study recommends that governments and other stakeholders should work towards increasing their financial assistance, implementing more robust measures to build startup businesses' financial resilience, provide more financial management capacity training programmes and achieving sound macroeconomic management to help reduce higher failure of these businesses. Addressing these issues will help these startups to contribute significantly to employment creation and economic growth in these countries. Originality/value The study contributes significantly to existing empirical studies by examining financial strategies (financial assistance, financial management capacities and sound macroeconomic management) to help tackle critical factors that lead to higher failure of startup businesses in developing and lower-middle-income countries. Existing empirical studies have not addressed this issue; hence, the study fills the gap by focusing on this issue.
Osei et al. (Tue,) studied this question.