Business Strategy

Effects of Covid-19 on Business and Financial Strategy of a Firm: Survey of Indian MSMEs

Article Details

Pub. Date	: June' 2022
Product Name	: The IUP Journal of Business Strategy
Product Type	: Article
Product Code	: IJBS010622
Author Name	: Amitabh S Dutta, Kishore G Kulkarni and Kun Peng Lai
Availability	: YES
Subject/Domain	: Strategic Journals
Download Format	: PDF Format
No. of Pages	: 16

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Abstract

This study uses a modified version of the questionnaire used in Zou et al. (2020) to survey a sample of privately held Micro, Small and Medium Enterprises (MSMEs) in India concerning the impact of Covid- 19 pandemic on business performance, what the owner/managers of firms did to survive, and what they feel about how their company will navigate 2022. Our survey results show that firms not only faced tremendous challenges to recover from the unprecedented shock of economic distress, but they also did it mostly without much official financial help. The paper reviews the few available survey studies and analyzes the results of the survey conducted. One can deduce that the lack of assistance had a severe effect on the survival of such MSMEs.

Introduction

Just as with the rest of the world, the Indian economy took a severe dip with the onset of the Covid-19 pandemic. Each country has had to face its own individual challenges, with different waves of the virus spread and evolving variants with differing levels of health impacts. Several studies have been published since 2020 that document various research findings of the havoc this pandemic has created in the economies of countries, regions, specific areas within countries, and so on. It will take some time for researchers to be able to capture the true impact on society from this global health tragedy. Each study will hopefully help shed a new light and add to our collective knowledge on the impacts of Covid-19 around the world.

As the main focus of this study, we wanted to gauge the effects of this pandemic on small and medium sized businesses in India, a sector that typically gets neglected in research, given that such entrepreneurial ventures are not publicly traded firms. So, being privately held companies means we have no audited financial statements available for gauging their performance. The only way to get information is by survey, administering a questionnaire to the owner/managers of these enterprises. Therefore using the primary data (as we do here) was seen as the only solution to this problem of lack of information.