The role of public aid and restrictions’ circumvention in SMEs’ pandemic survival strategies

Abstract

Objective: The article aims to find out what proactive or reactive actions of small and medium-sized enterprises (SMEs) helped them survive during the Covid-19 pandemic. This study focuses specifically on how the use of public aid and the restrictions’ circumvention impacted the outcomes of SMEs adjustment strategies.

Research Design & Methods: Adjustment strategies of small and medium enterprises representing restaurant, spa & beauty, fitness, and hotel industries were investigated. The interviews with business owners were analyzed using fuzzy set qualitative comparative analysis (fsQCA) to present non-linear interdependencies between the applied measures and their outcomes.

Findings: Successful adjustment strategies were contained in a spectrum of proactive actions combined with the circumvention of restrictions and the use of public aid. Strategies on the verge of survival were characterized by reactive measures accompanied by the use of public aid.

Implications & Recommendations: Proactivity significantly boosts the probability of successful survival, but it can take both legal forms and those that by design circumvent the law.

Contribution & Value Added: This paper contributes to understanding the impact of public aid on adjustment strategies of small and medium-sized enterprises in the B2C sector and deepening the knowledge on the grounds of SMEs (non)compliance with restrictions. Proactive strategies can include an element of law circumvention with the simultaneous use of public aid measures.

Keywords

COVID 19 pandemic, small and medium-sized enterprise strategies, circumvention of restrictions, external/public aid, fsQCA

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