Examining the impact of firm-specific and environmental-specific factors on short and long-term firm survival during an economic crisis

Abstract

PurposeLooking back on the last 12 years, the whole planet went through two major economic crises (2008 and 2019), which both had a profound impact on the survival of businesses. The present study aims to develop and empirically test a conceptual framework that investigates the factors that have an influence on firm survival. More specifically, the study proposes a three-dimensional framework that includes performance drivers (utilizing resource-based view [RBV] factors), performance measures and the measurement of firm survival. Such a multi-dimensional approach has very rarely been explored in the existing literature.Design/methodology/approachA thorough literature review revealed gaps in the literature and offered the basis for developing the proposed conceptual framework of the study. Its empirical examination (hypothesis testing) was conducted with the use of a newly developed structured questionnaire that was distributed to a group of Greek manufacturing organizations (the final sample consists of 364 manufacturing companies). Empirical data were analyzed using the “structural equation modeling” (SEM) technique (multivariate analysis) and other similar techniques (i.e. exploratory factor analysis and analysis of variance). The study is empirical (based on primary data), explanatory (examines cause and effect relationships), deductive (tests research hypotheses) and quantitative (includes the analysis of quantitative data collected with the use of a structured questionnaire).FindingsOn the one hand, empirical results point out that “manufacturing-marketing alignment,” “manufacturing capabilities,” “structural configuration” and “business performance under crisis” have the most significant impact and on short-term survival (current situation). On the other hand, “competitive advantage” and “business performance under crisis” have the most significant impact on long-term survival (future situation). Focusing on RBV factors, only “structural configuration” and “manufacturing capabilities” directly affect short-term survival, while “manufacturing–marketing alignment” has an indirect effect on the same factor. Then again, all RBV factors indirectly affect long-term survival. Also, it is confirmed that short-term survival strongly affects long-term survival.Originality/valueThe present study contributes to the debate concerning the antecedents of firm survival, since current empirical findings are quite inconsistent. Specifically, crucial performance drivers and other measures are incorporated into an original model, which reveals their synergies and their impact on the dynamic dimensions of firm survival. Additionally, it enhances the stream of research that investigates firm survival under crisis since very few similar empirical studies have been conducted. Finally, firm survival is not measured as a static concept but rather as a dynamic one (firm survival – current situation and firm survival – future situation). Overall, the final model can explain 35.2% of the variance in “firm survival – current situation” and 46.3% of the variance in “firm survival – future situation.”

Strategic and entrepreneurial abilities: Surviving the crisis across countries during the Covid-19 pandemic

“…Esteve-Pérez and Mañez-Castillejo suggest that a firm’s ability to develop resources enhances its ability to adapt to a changing competitive environment and improves its survival prospects [ 21 ]. Chatzoudes et al’s findings show the indirect impact of RBV factors on a company’s long-term survival during an economic crisis [ 22 ]. Mayr et al show the desirability of applying RBV assumptions in the context of crisis-affected companies [ 23 ].…”

The resilience of Romanian companies in the context of the COVID-19 pandemic: Relevant experiences and good practices

“…Previous analyses also include an assessment of the factors that helped companies to overcome the crises they faced. Thus, regarding the economic crisis of 2008–2009, the following factors have helped companies to be more resilient: the innovation and the entrepreneurial spirit of the managers as main characteristics of the management [ [46] , [47] , [48] ]; the ability to diversify and expand into new areas of business in order to compensate for low demand [ 49 ] or issues related to manufacturing capacity (“manufacturing-marketing alignment”, “manufacturing capabilities”) [ 50 ].…”

Examination of survival strategies of quantity surveying firms amid COVID-19 pandemic disruption in Lagos State, Nigeria

“…While Lai and Wong (2020) used the term crisis management strategies to denote the ways in which business organizations react to unexpected and negative situations that threaten their survival, profitability and sustainability, other researchers Ogbu (2018) and Chatzoudes et al, 2021, used the term survival strategies. Previous studies have defined survival practices in different ways.…”

“…According to Spaliara and Tsoukas (2013) firm characteristics could be considered as the first determinant of firm survival. Chatzoudes et al (2021) investigated the impact of firm and environmental specific factors on short and long-term firm survival during an economic crisis and found that manufacturing-marketing alignment, manufacturing capabilities, structural configuration and business performance under crisis have the most significant impact and on short-term survival. In contrast, competitive advantage and business performance under crisis have the most significant impact on long-term survival.…”