Public policy responses to COVID-19 and the survival of ethnic minority businesses (EMBs): does entrepreneurial orientation (EO) matter?

Abstract

PurposeThe global economic crisis triggered by the coronavirus disease 2019 (COVID-19) has caused the closure of countless ethnic minority businesses (EMBs) worldwide, partly due to the public policy responses. This paper investigates whether EMBs’ entrepreneurial orientation (EO) mediates the impact of public policy responses to COVID-19 on their survival.Design/methodology/approachUtilizing institutional theory, the authors developed a novel conceptual framework that divides policy responses to COVID-19 into aggressive (imposing restrictions on movement, e.g. lockdowns) and less aggressive policy responses (not imposing restrictions on movement, e.g. social distancing). The authors then surveyed intra-regional EMBs, specifically businesses owned by ethnic minorities in the Kano and Katsina provinces of Nigeria, and analysed the data using structural equation modelling and analysis of variance (ANOVA).FindingsThe authors found that intra-regional EMBs in developing countries are very vulnerable to the public policy responses imposed by governments to curb COVID-19. Aggressive policy responses have a more significant negative effect on the survival of intra-regional EMBs than their less aggressive counterparts. Furthermore, the authors found that EO as a crisis response strategy significantly supports intra-regional EMBs in managing their vulnerability to the hostile institutional environment, reduces the adverse effect of public policy responses and stimulates their survival during the COVID-19 pandemic.Originality/valueThis paper contributes to the institutional theory of small and medium-sized enterprises (SMEs)/entrepreneurship and the literature on EMBs by showing the role of EO in mediating the effects of COVID-19 institutional policies on the survival of intra-regional EMBs.

Guest editorial: The effect of COVID-19 on the performance of ethnic-minority firms in the UK and worldwide

“…The first paper titled “ Public policy responses to Covid-19 and the survival of ethnic minority businesses (EMBs): Does entrepreneurial orientation (EO) matter ?” written by Kabir and Abubakar (2023), examine the relationship between government response to the pandemic and the survivability of ethnic-minority firms located in the intra-region provinces of Nigeria. The paper explores whether entrepreneurial orientation mediates the above-mentioned nexus and act as a shock absorber to policy responses and promote EMBs’ survival.…”

“…Although previous research in the filed examined the survival of ethnic-minority firms during a crisis, Kabir and Abubakar’s (2023) study is the first to examine how the role of entrepreneurial orientation mediates the relationship between institutional policy responses to the pandemic and firms’ survival in intra-regions in a developing economy. Their study contributes to previous research by suggesting that entrepreneurial orientation can act as a crisis response strategy and as a shock absorber to reduce the negative effect of the imposed government policies, allowing firms to survive the crisis.…”

“…Although previous research in the field of entrepreneurship examined how ethnic minority firms survive a crisis, the role of entrepreneurial orientation as a mediator was not explored. In this invited volume Kabir and Abubakar (2023) show that entrepreneurial orientation can be employed as a response strategy to a crisis being faced by EMBs thus enabling these firms to survive. An interesting avenue for future research is to explore the role of entrepreneurial orientation as a response strategy in a wider perspective and not just by focussing on ethnic minority firms.…”

“Stay home, save SMEs”? The impact of a unique strict COVID-19 lockdown on small businesses

“…Various studies have provided evidence on the experience of SMEs during the pandemic, for example microbusinesses' survival strategies (Arslan et al, 2022); ethnic minority businesses (Cowling et al, 2021;Crick et al, 2021;Kabir and Abubakar, 2022) with the first focussing on bank lending, the second on interfirm collaboration, and the third on their entrepreneurial orientation and survival. Fares et al (2022) is the closest to the current study and takes a similar interview-based and qualitative approach.…”

“…Prior research on the impact of the COVID-19 pandemic on SMEs has included various studies focussing on the following aspects: (1) government support (Belghitar et al, 2022;Kabir and Abubakar, 2022); (2) economic effects (Belitski et al, 2022;Pedauga et al, 2022) (3) financing (Calabrese et al, 2022;Cowling et al, 2021;Liu et al, 2022a, b;Wellalage et al, 2022); (4) business models/business model innovation (Clauss et al, 2022;Crick et al, 2021); and (5) challenges and recovering from the pandemic (Sharma et al, 2022a, b). The current study also contributes to the literature on DCs and entrepreneurial resilience by linking these two theoretical domains in the context of the impact of the somewhat stricter lockdown policies in the study economy, which also had its international borders sealed as part of an eventually abandoned elimination strategy.…”