Micro, small, and medium enterprises (MSMEs) form the backbone of Phnom Penh’s urban economy, yet they are increasingly pressured by economic slowdown, and digital disruption. High business turnover reflects survival-driven entrepreneurship, with most firms remaining informal, micro-scale, and concentrated in low-productivity sectors. Given these challenges, studying MSME dynamics, particularly firm entry and exit trends, has become more critical than ever.

This study contributes to filling an important knowledge gap by providing an in-depth assessment of MSMEs’ resilience and structural transformation in Cambodia’s capital, Phnom Penh.

The research addresses three interlinked objectives:

• To analyse MSME dynamics, including firm entry and exit within a 12-month period, and profile currently operating businesses;
• To identify business owners’ self-reported reasons behind closures;
• To examine factors contributing to MSME success using evidence from the national Economic Census of Cambodia 2022.

This study addresses these challenges by focusing on Khan Meanchey, one of Phnom Penh’s most commercially active and rapidly expanding districts. The findings contribute to a deeper understanding of urban MSME ecosystems and offer actionable insights for targeted policy interventions.