Multilevel Analysis Applied in High-Impact Environments: Causes and Effects of Firm and Political Activities During the Pandemic in the Restaurant Sector

The COVID-19 pandemic has meant a serious risk to the economic viability of companies and the sustainability of employment in the restaurant sector, a high-impact activity for the economy and employment in Mexico and Spain. This paper analyzes the causes of the prolonged and intense damage to companies and employees via multilevel analysis techniques and a qualitative, inductive methodology drawing on multiple sources. Research propositions posit that the sectoral structure, management practices, and institutional actions during and after the pandemic are predictors of recovery or continued losses. The balanced result of these three levels of analysis, in a severe crisis situation, such as the global pandemic, reveals that the combination of low institutional protection at the macro level, a hostile industry structure at the meso level, and a focus solely on economic sustainability as the primary business objective resulted in widespread resignation and put survival at risk, particularly for smaller companies and entrepreneurs. Analysis of the firms’ and stakeholders’ actions also shed light on the inter-relations, such as the negative effect of macro general policies on a fragmented, asymmetric meso level. Inter-relations among customers and firms’ behavior gave insights that could increase resilience before general critical events. Finally, the balanced results recommend a simultaneous effort from firms and policy makers to make possible a profound change while addressing the sector’s shortcomings. Firms’ effort in managing key assets, such as human capital, to acquire the capacity for the flexibility, adaptability, and innovation essential for change and renewal, must be endorsed by institutional support and customer recognition of the contributions of this singular service and cultural industry.