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The impact of global economic crisis on SMEs

Author

Listed:
  • Juha Soininen
  • Kaisu Puumalainen
  • Helena Sjögrén
  • Pasi Syrjä

Abstract

Purpose - The purpose of this paper is to examine the role of the entrepreneurial orientation (EO) in global economic crisis and whether it can mitigate the negative effects of economic crisis both on firm's operations and on firm's financial performance. Design/methodology/approach - A quantitative approach is used to test the hypotheses. Principal component analysis and multiple regression analysis are used on the empirical survey data. Findings - Results based on a sample of almost 200 Finnish small and medium‐sized enterprises indicated that the different dimensions of the EO can have diverging effects on how firms are impacted by the recession. In general, the more innovative and proactive the firm is, the less its operations are affected by the recession and the more risk‐taking the firm is, the more its profitability is affected by recession. Research limitations/implications - A longitudinal design – rather than the current cross‐sectional design – would give a better premiss to explore the causal relationships among the research variables. Originality/value - The paper is one of the first works linking EO with the effects of recession at the firm's operational level and the paper expands prior knowledge by taking the EO‐performance relationship into the context of recession.

Suggested Citation

  • Juha Soininen & Kaisu Puumalainen & Helena Sjögrén & Pasi Syrjä, 2012. "The impact of global economic crisis on SMEs," Management Research Review, Emerald Group Publishing Limited, vol. 35(10), pages 927-944, September.
    • Handle: RePEc:eme:mrrpps:v:35:y:2012:i:10:p:927-944
    DOI: 10.1108/01409171211272660
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    Citations

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    Cited by:

    1. David Urbano & Maribel Guerrero & João J. Ferreira & Cristina I. Fernandes, 2019. "New technology entrepreneurship initiatives: Which strategic orientations and environmental conditions matter in the new socio-economic landscape?," The Journal of Technology Transfer, Springer, vol. 44(5), pages 1577-1602, October.
    2. Jung, Hyejin & Hwang, JungTae & Kim, Byung-Keun, 2018. "Does R&D investment increase SME survival during a recession?," Technological Forecasting and Social Change, Elsevier, vol. 137(C), pages 190-198.
    3. Rapp, Marc Steffen & Wolff, Michael & Hennig, Jan C. & Udoieva, Iuliia, 2019. "Mitbestimmung im Aufsichtsrat und ihre Wirkung auf die Unterenhmensführung: Eine empirische Analyse vor dem Hintergrund der Finanz- und Wirtschaftskrise," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 127, number 424, March.
    4. Paloma Escamilla-Fajardo & Juan M. Núñez-Pomar & Ferran Calabuig-Moreno & Ana M. Gómez-Tafalla, 2020. "Effects of the COVID-19 Pandemic on Sports Entrepreneurship," Sustainability, MDPI, vol. 12(20), pages 1-12, October.
    5. Anastasios Kitsos & Paul Bishop, 2018. "Economic resilience in Great Britain: the crisis impact and its determining factors for local authority districts," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 60(2), pages 329-347, March.
    6. Luis Pedauga & Francisco Sáez & Blanca L. Delgado-Márquez, 2022. "Macroeconomic lockdown and SMEs: the impact of the COVID-19 pandemic in Spain," Small Business Economics, Springer, vol. 58(2), pages 665-688, February.
    7. Takács, András & Várkonyi, Patrik, 2022. "A hazai kis- és középvállalati szektor vállalatértékelési sajátosságai [Specialities in the valuation of Hungarian SMEs]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 1195-1212.
    8. Tatiana Beliaeva & Galina Shirokova & William Wales & Elena Gafforova, 2020. "Benefiting from economic crisis? Strategic orientation effects, trade-offs, and configurations with resource availability on SME performance," International Entrepreneurship and Management Journal, Springer, vol. 16(1), pages 165-194, March.
    9. Timo Tammi & Helen Reijonen & Jani Saastamoinen, 2017. "Are entrepreneurial and market orientations of small and medium-sized enterprises associated with targeting different tiers of public procurement?," Environment and Planning C, , vol. 35(3), pages 457-475, May.
    10. Shirokova, G. & Beliaeva, T. & Gafforova, E., 2016. "Strategic orientations during economic crisis: Stay focused or adopt a broader strategic direction?," Working Papers 6444, Graduate School of Management, St. Petersburg State University.
    11. Piers Thompson & Wenyu Zang, 2018. "The foreign business and domestic enterprise relationship: Its implications for local entrepreneurial resilience," Local Economy, London South Bank University, vol. 33(1), pages 10-39, February.
    12. Eggers, Fabian, 2020. "Masters of disasters? Challenges and opportunities for SMEs in times of crisis," Journal of Business Research, Elsevier, vol. 116(C), pages 199-208.

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