COVID-19 Pandemic and SMEs Performance Decline: The Mediating Role of Management Innovation and Organizational Resilience

How dynamic capabilities enable Chinese SMEs to survive and thrive during COVID-19: Exploring the mediating role of business model innovation

As a response to the damage caused by the spread of COVID-19, the Chinese government has implemented severe quarantine measures that have greatly affected the operational patterns of small and medium-sized enterprises (SMEs). This paper explores the critical role of dynamic capabilities (DCs) in helping Chinese SMEs manage crises, adjust their business strategies, and mitigate the uncertainty caused by the epidemic. Although the importance of DCs in promoting organizational resilience is well recognized, academic research on their specific contributions to business model innovation (BMI) and SME performance improvement during crises remains scarce. Our study fills this gap by pioneering the development and empirical testing of a microintegrated mediation model linking DCs, BMI and organizational performance. By surveying 257 Chinese SMEs severely affected by a pandemic, we verify our hypotheses using partial least squares structural equation modeling (PLS-SEM). Our results strongly show a positive relationship between DCs and BMI and SME performance. In addition, we found that BMI plays a partial mediating role in the interrelationship between DCs and SME performance. Our findings clarify the critical role of BMI as a channel through which SMEs' DCs can be transformed into higher performance in the face of sudden crises. Thus, our results not only contribute to the broader discussion of strategic management and organizational theory but also provide theoretical and practical insights into the mechanisms by which SMEs can increase their flexibility and resilience in a crisis. Thus, our results not only contribute to the broader discussion of strategic management and organizational theory but also provide theoretical and practical insights into the mechanisms by which SMEs can increase their flexibility and resilience in a crisis. Importantly, this study suggests policy and market strategies that can support SMEs in leveraging DCs and BMI for sustained performance, thereby contributing valuable insights for policymakers and business leaders aiming to fortify economic stability and growth in the face of global health emergencies.

Internal factors of entrepreneurial and business performance of small and medium enterprises (SMEs) in East Java, Indonesia

The analysis conducted in this empirical study is the direct and indirect impact of internal entrepreneurial factors on the performance of small and medium enterprises. These factors were identified from previous studies from various countries, such as entrepreneurial-innovative work behavior, entrepreneurial leadership, entrepreneurial self-efficacy, and entrepreneurial motivation, by taking the research object of small-medium enterprise owners in Java. East, Indonesia. Descriptive statistics and structural equation models were used to analyze the research data. Samples were taken with uncontrolled quota sampling techniques. The research data was collected by distributing questionnaires online with the Google form application and offline. The total respondents were 575 small-medium enterprise owners. The test results showed that internal factors such as entrepreneurial self-efficacy, motivation, and leadership could increase business performance significantly.In contrast, entrepreneurial-innovative work behavior cannot significantly increase business performance. Other test results showed that: 1) entrepreneurial self-efficacy significantly improved entrepreneurial motivation; 2) entrepreneurial leadership significantly improved innovative entrepreneurial behavior; 3) entrepreneurial motivation partially mediated the influence of entrepreneurial self-efficacy on business performance; 4) innovative entrepreneurial behavior did not mediate the influence of entrepreneurial leadership on business performance. The contribution of the results of this study provides additional empirical studies on the role of entrepreneurial leadership, which significantly increases innovative entrepreneurial behavior. There is a lot of potential to develop business existence through entrepreneurial leadership through innovative behavior in entrepreneurship. Another contribution of this study is that entrepreneurial self-efficacy is a dominant predictor of business performance in SMEs and significantly increases entrepreneurial motivation. These findings reveal the importance of self-efficacy for SMEs because high self-efficacy for business actors is expected to increase entrepreneurial self-efficacy and teamwork motivation in helping to achieve business performance.

How does COVID-19 pandemic affect entrepreneur anxiety? The role of threat perception and performance pressure

The entrepreneurial firms may be more vulnerable to the COVID-19 pandemic, and the entrepreneurs of entrepreneurial firms are also threatened by the revenues decline and business failure, which vehemently affect their well-being. The mental health of the entrepreneur decides whether the entrepreneurial firms can make the right decision, which is related to the healthy development of the entrepreneurial firms. Based on the event system theory and the cognitive appraisal theory, this paper aims to explore the effect of COVID-19 pandemic on the entrepreneur anxiety, and the threat perception and performance pressure are introduced to investigate the mediating mechanism and boundary of this effect. Using the simple random sampling to obtain questionnaire survey data, 168 entrepreneurs of entrepreneurial firms have participated in the empirical study, and the research results are as follows. First, the COVID-19 pandemic significantly positively affects entrepreneur anxiety. Second, the entrepreneur threat perception plays a mediating role between the COVID-19 pandemic and the entrepreneur anxiety, which means the COVID-19 pandemic can enhance the external threat perception of entrepreneurs, and then affect the entrepreneur anxiety. Third, the positive effect of the COVID-19 pandemic on the entrepreneur anxiety is strengthened by the entrepreneur performance pressure, while the positive effect of entrepreneur threat perception on entrepreneur anxiety is weakened by the entrepreneur performance pressure. The above findings are helpful to explore the mechanism of the COVID-19 pandemic and other critical crisis events on entrepreneurs' mental health from the new perspective of cognitive appraisal theory and event system theory, filling the research gaps between the COVID-19 pandemic and entrepreneur anxiety. Besides, this study broadens the applied range of the cognitive appraisal theory and the event system theory in the fields of crisis situations and entrepreneur research, and enriches the research outputs. Furthermore, this study will help provide a new theoretical analysis insight for the related research on how the COVID-19 pandemic affects entrepreneurs' psychology, and further deepen researchers to understand the mechanism of entrepreneur anxiety under the COVID-19 pandemic, providing theoretical inspirations for reducing entrepreneur anxiety. What's more, this study finds that individual pressure can affect their cognitive appraisal, which means that future research should take the pressure influential mechanism into consideration in the process of exploring "external stimulus--cognitive appraisal--emotional response," further expanding the theoretical model of cognitive appraisal proposed from the perspective of pressure.