Akhilesh K. Sharma and Sushil Kumar, Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms (2023)
Summary
A journal article by Akhilesh Kumar Sharma of the Institute for Studies in Industrial Development and Sushil Kumar Rai of the University of Petroleum and Energy Studies, Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms, published in the Journal of Small Business Strategy, Vol. 33, Issue 1, 2023, pages 70–83. Using descriptive statistics and probit regression on a survey of 225 firms, it reports that around 90 percent of surveyed firms saw a decline in turnover, with a 25 percent reduction in employment mostly in the informal category. It finds that smaller and younger firms were more likely to be affected and that government support measures during the pandemic were insufficient. It proposes an Uncertainty Corpus Fund for Small Businesses and Small Business Insurance.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Akhilesh K. Sharma and Sushil Kumar, Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms (2023).”
Original at jsbs.scholasticahq.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/akhilesh-k-sharma-and-sushil-kumar-understanding-the-impact-of-covid-1-a744fc713e/
, SHA-256 2e6c36e8f44f6dce4965df78ffdfc594055aac3c4b59e7c37d3a4511cf39af0b.Full text
Sharma, A. K., & Rai, S. K. (2023). Understanding the Impact of Covid-19 on MSMEs in
India: Lessons for Resilient and Sustained Growth of Small Firms. Journal of Small
Business Strategy, 33(1), 70–83. https://doi.org/10.53703/001c.72698
articles
Understanding the Impact of Covid-19 on MSMEs in India: Lessons
for Resilient and Sustained Growth of Small Firms
a b
Akhilesh Kumar Sharma1 , Sushil Kumar Rai2
1 Institute for Studies in Industrial Development, 2 University of Petroleum and Energy Studies, Dehradun
Keywords: MSMEs, Covid-19, Resilience, Sustained Growth, India
https://doi.org/10.53703/001c.72698
Journal of Small Business Strategy
Vol. 33, Issue 1, 2023
The pandemic has raised an issue of survival for most of the micro, small, and medium
enterprises (MSMEs) because of their vulnerability in terms of size, limited financial
resources, and inefficiency to deal with unpredicted situations. Therefore, the present
study has adopted the contingency theory in times of change and uncertainties caused by
COVID-19 on MSMEs and found out the ways to enhance its resilience and sustained the
growth of this sector. This study has applied descriptive statistics and probit regression
analysis to estimate the resilience and sustained growth of the firms through a change in
the variables like turnover, labour employed, investment, and age of the firm. Based on
the survey of 225 firms, the study observed that around 90 percent of surveyed firms
realized a decline in their turnover with a 25 percent reduction in employment that
mostly occur in the informal category. Interestingly, there was some increase in formal
employment in around 50 percent of firms because of the business commitment of firms,
shortage of informal workers, and availability of workers at lower wages. Smaller and
younger firms in terms of employment and investment have a higher possibility to be
affected by the external shocks indicating that the firm agility increases with firm age and
size. Support measures by the government during the pandemic were found to be
insufficient and have limited relevance to the MSME sector in its revival. For enhancing
the resilience and sustainability of MSMEs, the study suggests small firms should be
encouraged to financial planning against business uncertainties and proposes financial
security measures viz. Uncertainty Corpus Fund for Small Businesses and Small Business
Insurance.
Introduction in any economy. Therefore, MSMEs are crucial in main-
taining the delivery of goods and services during and after
Micro, small and medium enterprises (MSMEs) con- any public health crisis like the COVID-19 pandemic (Bur
tribute significantly to the economic development of a na- ton et al., 2011; McCall, 2020). In comparison to large in-
tion through enhancement in employment opportunities, dustries, this sector generates more employment at lower
bringing technological changes, creating social stability, capital cost and assists the economy to promote industrial-
encouraging entrepreneurship, and fostering industrializa- ization in remote areas also, thereby, reducing regional im-
tion. Moreover, these enterprises are producing a varied balances and assuring equitable distribution of national in-
range of outputs and services to accommodate the needs of come and wealth.
the domestic as well as global market (Singh et al., 2019). The outburst of COVID-19 and the responses of different
By employing millions of people, these enterprises are economies have led to a decline in economic activity
playing a major role in income generation, poverty reduc- around the globe. The policy of restrictions on mobility
tion, and creating domestic demand. These enterprises are within a country and between countries along with the clo-
indispensable for the smooth functioning of supply chains sure of workplaces have generated economic uncertainty
a Dr. Akhilesh Kumar Sharma, Assistant Professor, Institute for Studies in Industrial Development, New Delhi-110070, India, Mob:
+91-9718293821, E-mail: aksbhu2608@gmail.com, ORCID id: 0000-0002-1718-733X
b Corresponding Author
Dr. Sushil Kumar Rai, Associate Professor, Department of Economics & IB, School of Business, University of Petroleum and Energy
Studies, Dehradun, Uttrakhand-248007, India, Mob: +91-9950398466, Email id- sushilrai23@gmail.com, ORCID id:
0000-0003-0045-0004
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
that finally resulted in shrinkage in demand and disruption small firms from the perspective of entrepreneurial inten-
in supply chains globally (Cacciapaglia et al., 2020; Kuebart tion (Jena, 2022), strategic agility and its association with
& Stabler, 2020). The current crisis is different from the firm age, firm size, and firm performance (Reed, 2021),
global financial crisis of 2008 because of its dual impact on leadership practices and entrepreneurial resiliency
the economy from both supply and demand sides with a (Hutchinson et al., 2021), strategic entrepreneurship for
significant increase in unemployment. Lockdown and other disrupted firms (Thomas & Douglas, 2021), and entrepre-
precautionary measures introduced to contain the spread neurs’ personality traits of resilience and high-power dis-
of COVID-19 have severely affected all types of enterprises, tance impact on consumers’ evaluations of sustainability
but these restrictions have more severe impacts on MSMEs practices (Vizcaíno et al., 2021). These factors are perfectly
than on larger firms. MSMEs are most vulnerable to such applicable in normal predictable conditions to analyze the
unexpected situations because of the lower capital reserve, sustainability and resilience of firms. However, during a
fewer assets, and lower levels of productivity (OECD, 2020). period of forced change and uncertainty generated by
During the pandemic, a decrease in GDP and trade activity COVID-19 that affect small business at the global level,
around the globe further deepen the challenges faced by the factors like the experience of the firms to handle a
MSMEs especially micro enterprises, and therefore most such crisis, firms’ internal resources, financial prudence of
governments struggle to introduce effective policies for the firms, and government support become more effective.
MSMEs to respond to the current crisis appropriately Therefore, in the present study we have pursued to address
(Haleem et al., 2020; Nicola et al., 2020). Due to their oper- the following research questions to understand the impacts
ational size and insufficient resources, MSMEs are compar- of the current pandemic on MSMEs in India and their
atively more vulnerable to large industries under economic strategies to develop resilience and achieve sustained
uncertainty (Bartik et al., 2020; Prasad et al., 2015). These growth against such incidence in the future: (a) Does sup-
limitations of MSMEs have been realized more intensively port measures of the government influence the resiliency of
around the globe during the pandemic. Among MSMEs, the the firm and sustain growth?; (b) Does the size of the firm
probability of failure is comparatively high for micro enter- improve its resiliency and sustain growth?; (c) How does
prises (Davidsson & Gordon, 2016). the experience of the firms affect its resilience and sustain
In India, there are around 63.39 million MSMEs. Among growth?; and (d) Is there any impact of financial prudence
them, the majority are micro enterprises, around 99.5 per- of the firms on its resilience and sustain growth? To ex-
cent. The MSME sector employs around 111 million workers amine the above-mentioned research questions, the pre-
and contributes around 40 percent to the total output pro- sent paper applied descriptive statistics and probit analysis.
ducing around 30 percent of the total GDP and approxi- Our empirical results provide evidence that during the pan-
mately 50 percent of the total export from India. To revive demic small firms were facing issues from both the demand
the economy and support MSMEs from the severe impacts and supply sides, and that resulted in a decrease in turnover
of COVID-19, the Government of India (GOI) announced and an increase in unemployment, especially in the infor-
various measures under the ‘Atmanirbhar Bharat’ package mal employment segment. The impact was observed more
in May 2020. The stimulus package aimed to assist all sec- severe on small and micro enterprises among MSMEs. The
tors including labourers, agriculture, cottage industries, majority of MSMEs suffered heavily during the pandemic,
MSMEs, and industries with an emphasis on local markets and lack of financial resources and flexibility to invest in
and supply chains. MSMEs’ definition was also revised by new business opportunities during the crisis. Our findings
increasing investment limits for each subcategory of also suggest that the supportive measures implemented by
MSMEs and including turnover as an additional criterion. the government were too small to handle issues of large
Reserve Bank of India has also taken some initiatives to in- and diversified MSMEs. These findings have important pol-
crease liquidity in the financial market, reduce in timely re- icy implications for the resilience of small firms and suggest
payment of debts, and provision of borrowing for individ- that small firms need to have a financial plan for economic
uals and industries with cheaper rates from banks to assist shocks and business uncertainties.
the MSMEs from the financial crunch. Though the economy The rest of the paper is prepared as follows. The theo-
has shown a sign of recovery after the relaxation of lock- retical background and development of the hypothesis are
down and containment measures gradually from June 2020, mentioned in the theoretical underpinning and hypotheses
it has been difficult for many MSMEs to resume operation section. In the literature review section, the available lit-
which further resulted in economic losses and kept many erature is summarized with the research gap. In the next
on the brink of closing permanently. section of methodology, brief details of data collection and
The issue of resilience and sustainability growth of the methods used for the current study are stated. The outcome
small business has been continuously evaluated by the re- of this study is included in the results and discussion sec-
searcher before and after the COVID-19 episode. Resilience tion. The last section of the conclusion and policy recom-
is defined as the ability of any firm to absorb, respond, mendations discusses lessons for resilience and planning
and retrieve from situations that could threaten its exis- against economic uncertainties for small firms with theo-
tence while the sustained growth rate is a rate that can retical implications and limitations of this study.
be achieved by the firm on its internal resources without
any external support. Most of the available studies exam-
ined the issue of resilience and sustaining the growth of
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Theoretical Underpinning and Hypotheses small firms to absorb, respond, and retrieve during the
COVID-19 crisis and stimulates sustainable growth.
MSMEs are more vulnerable to the unrest created by the The above discussion indicates that the crisis encoun-
COVID-19 pandemic because of their limitations in terms tered by small businesses at the global level during and af-
of size, financial resources, and lack of experience to deal ter COVID-19 can be handled appropriately with the judi-
with such a crisis. The COVID-19-led conditions elevate the cious use of the internal and external environment. Since
question that how a business organization can deal with the the impact of COVID-19 was comparatively severe for all
conditions of uncertainties efficiently. In this regard, the types of small businesses because of their size, resources
study of Vizcaíno et al. (2021) suggests that firms must pro- available, and financial conditions therefore these small
mote teamwork instead of focusing on task specialization businesses are assisted by the supportive measures of the
to enhance organizational citizenship behaviour. A poly- government to revive and rebuild this sector. This helps us
chronic environment will allow the firm to build a collab- to construct our first hypothesis.
orative structure in which employees feel comfortable and
react faster to challenging situations. Martin et al. (2020) Hypothesis 1. The supportive measures of the govern
ment have increased firms’ resiliency and helped to attain
analyzed the relationship among marketing capabilities,
sustained growth.
competitive strategy, and export venture performance un-
der the presence of marketing communication and techno- The available literature on MSMEs suggests that firm
logical instability within the framework of resource-based size is associated with firm agility. Small firms are incapable
theory. The results indicate that marketing communication to deal with such type of turbulence efficiently because of
mediates the relationship between marketing capabilities a lack of resources. The firm agility increases as the firm
and competitive strategy to increase export venture perfor- grow larger and enable them to reconfigure the available re-
mance. The study suggests the dual impact of technologi- sources and capabilities to address such uncertainties aptly
cal turbulence, one to strengthen the relationships between (Reed, 2021). This leads to the construction of our second
marketing capabilities and the other, between marketing hypothesis.
communication and competitive strategy. Based on the the-
ory of marketing-firm, Sigurdsson et al. (2020) examined Hypothesis 2. The firms’ size increases firms resiliency
customer-firm bilateral contingencies for the aviation sec- and helps to attain sustained growth.
tor. The study shows that marketing firms’ actions through
As pointed out by the study of Hutchinson et al. (2021)
social media campaigns are significant and positively re-
that personal and business experiences of crisis help busi-
lated to customers’ post-engagement behaviours and fi-
ness owners to exercise entrepreneurial resilience effec-
nally can result in a decrease in transaction costs. All these
tively. The experience earns by the firms as they grow older
studies are indicating that how can a business organization
and in the due process the firm learns how to handle rapidly
enhance its capabilities and performance through the strat-
changing internal and external environments successfully.
egy of efficient use of internal resources under a recognized
This facilitates to development of our third hypothesis.
external environment. But the issues and environment (in-
ternal as well as external) faced by the small businesses Hypothesis 3. The firms’ age increases firms’ resiliency
during COVID-19 were entirely different. The current crisis and helps to attain sustained growth.
of the pandemic which affected all sorts of business ac-
tivities at the global level, contingency theory provides an One of the characteristics of small firms is that they are
appropriate framework to understand the responsiveness facing an issue of a paucity of financial resources (Prasad et
and adaptive nature of the small business to show their re- al., 2015). The lack of financial resources is associated with
silience and growth. The contingency theory as explained a decrease in sustainability expenditure by MSMEs (Boso
by Fiedler (1951), is used to understand the organizational et al., 2017). Investment expenditure is one of the ways by
decisions which are contingent on any internal and exter- which small firms can rebuild and revive during a time of
nal determinants in a particular situation. Internal envi- crisis. This allows us to construct our fourth and final hy-
ronments are within the control of the firm (resources, ex- pothesis.
perience) and external environments (disasters, change in Hypothesis 4. Investment expenditure increases firms’ re
trends, uncertainties) are beyond the control of the firm. siliency and helps to attain sustained growth.
The theory suggests that organizations seek to improve
their strategy to align with the changing external and in- Literature Review
ternal environment to achieve an edge in competitiveness,
growth in performance, and sustainability (Donaldson, In response to the COVID-19 pandemic, most countries
2001). Under these circumstances, the decisions of the adopted containment measures such as lockdowns, quar-
firms should have to be flexible and the firm should be antine, and social distancing to restrict the spread of the
ready to adapt to current situations. Thus, the decisions are virus that affected the mobility of factors of production
based on contextual factors. The contingency theory rec- and stopped the majority of business activities (Lonergan
ommends that any organizational structure needs to align & Chalmers, 2020). These restrictions led to the closure
with three contingencies related to the external environ- of workplaces, a decline in labor supply, a reduction in
ment, size, and strategy (Donaldson, 2006). The alignment the supply of raw materials, and a disruption in supply
of these three contingencies variables will support the chains globally (Ernst & Young, 2020). Further, the uncer-
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
tainty about economic recovery compelled people to de- Methodology
crease their expenditure, which resulted in a decline in Data Collection
demand. Therefore, the pandemic and its containment
measures have generated both demand and supply shocks The study is based on primary data collected through
in all countries across the world (Bekaert et al., 2020; del a telephonic survey of 225 small firms located in Uttrak-
Rio-Chanona et al., 2020; Guerrieri et al., 2020; Sharma, hand and the National Capital Region (NCR) which com-
2022). The world is facing challenges on all fronts such as a prises of National Capital Territory of India, and parts of
contraction in the gross domestic product (GDP), a decline Uttar Pradesh, Haryana, and Rajasthan. Around 22.11 per-
in trade, disruptions in supply chains, inflation, and em- cent of MSMEs are in these states altogether (i.e., Delhi, Ut-
ployment reduction. It has affected millions of people and tar Pradesh, Haryana, Rajasthan, and Uttarakhand), as per
all types of firms. However, small firms are at higher risk of the 73rd round survey of non-agricultural enterprises, ex-
such a crisis in comparison to large firms due to a lack of fi- cluding construction, conducted by National Sample Sur-
nancial and human resources (Bartik et al., 2020; Prasad et vey Office, India. The survey was conducted using a semi-
al., 2015; Shafi et al., 2020). structured questionnaire from October 2020 to March 2021.
The majority of MSMEs have been severely affected dur- Data about turnover, investment, and employment were
ing the pandemic and facing all sorts of challenges such collected for two financial years i.e. 2019-20 and 2020-21.
as paucity of liquidity, supply chain disruption, and reduc- Since data was collected during the financial year 2020-21,
tion in sales, revenue, and profit (Shafi et al., 2020; Tairas, expected values of turnover, investment, and employment
2020; Wijaya, 2020). In addition to this, MSMEs were also for the current financial year were asked from the respon-
facing a shortage of working capital mainly due to a reduc- dent, i.e., the owner of the firm.
tion in cash flow and reduced access to finance. These fac- Out of 225 firms, around 42 percent were in Uttarakhand
tors collectively lead to an increase in the operational cost while the rest 58 percent were in NCR. In terms of sector-
of MSMEs during the pandemic. From the demand side, specific, 163 firms (72.44 percent) were engaged in manu-
the decline in public consumption and the increase in the facturing activities while 62 firms (27.56 percent) were en-
prices of goods during the pandemic were responsible for gaged in service activities. Major activities of these firms
the increase in the inventory of finished goods and the car- include the manufacture of food products, manufacture of
rying cost of firms (Lemi et al., 2020). Most SMEs were un- rubber and plastic products, accommodations, manufacture
able to resume work because of the inability of employees of pharmaceutical medicinal chemical and botanical prod-
to return to work, stringent lockdown policy, reduced mar- ucts, food and beverage service activities, specialized con-
ket demand, and shortage of epidemic mitigation materials struction activities, etc. Further, among these firms, 16 per-
(Lu et al., 2020). Among different challenges that emerged cent were micro enterprises, 48.78 percent were small
during COVID-19, the issue of logistics, decrease in sales, enterprises and 34.22 percent were medium enterprises as
lower access to finance, and reduction in capacity utiliza- per the new definition (Table 1). All firms were registered
tion were experienced more by small firms across the globe firms. Therefore, the sample firms represent only formal
(Aftab et al., 2021; Juergensen et al., 2020; Nordhagen et sector enterprises. It can be a major limitation of this study.
al., 2021; Ratnasingam et al., 2020). The study by Cepel
et al. (2020) evaluated the entrepreneurs’ attitudes toward Model Specification
the selected business risks and found that market, financial,
and personnel risks were considered by SMEs as the three To understand the causal relationship between firm size,
most significant risks before and after the COVID-19 crisis. investment level, and age of the firm on the possible impact
The above discussion indicates that most of the studies of COVID-19 on MSMEs, a probit regression model has been
focus mainly on financial and operational support along applied. Since the majority of firms have been negatively
with a shift from traditional business models to the more affected by the pandemic, the impact of COVID-19, the de-
innovation-led techno-friendly model during and after the pendent variable, has been measured in terms of binary
pandemic. However, they fail to highlight the need for fi- numbers for the regression analysis- if the firm’s turnover
nancial planning for small businesses in advance and sug- has declined due to the pandemic and its containment mea-
gest policy measures so that small firms can be resilient sures while 0 for the rest i.e., no change in turnover or in-
enough to face business uncertainty when it arises. Long- crease in turnover. The explanatory variables - firm size,
term planning of financial resources by MSMEs may enable investment level, and age of the firm have been measured
them to sustain their growth during business uncertainties in terms of the number of labours employed, investment
caused by external shocks such as a pandemic, sudden pol- in plant and machinery/equipment, and the difference be-
icy changes, etc. The present study is an endeavor in this tween 2020 and the inception year of the firms respectively.
direction. While understanding the impact of Covid-19 on The empirical model has been shown in equation (1):
MSMEs in India, we have tried to bring out some policy rec-
ommendations that may help the MSME sector to develop
its resilience and enable it to sustain growth during any fu- Where denote the number of firms considered in the
ture external shocks. study.
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Probit Model The immediate implications of this revision in the MSME
definition are that it enables a few large firms to be cat-
The method of ordinary least squares (OLS) is not ap- egorized as MSMEs and avail benefits of policy initiatives
plicable when the dependent variable is binary and takes a under the ‘Atmanirbhar Bharat’ package announced to sup-
value between 0 and 1. This is because OLS does not guar- port and revive the MSME sector which is severely affected
antee that the estimated probabilities will lie within the by the pandemic (Sharma, 2022). Though it is a small sam-
bounds of 0 and 1. In such conditions, the probit model, ple size, the present study of 225 firms also depicts it. If
which assumes a normal distribution of error terms (Xu & sample firms are categorized as per the old MSMEs defin-
Long, 2005), will be applicable. The probability that unob- ition, 61 firms are large, 39 firms are medium enterprises
servable utility index is less than or equal to utility in- and 125 firms are small enterprises (Table 2). However, as
dex can be computed from the standard normal cumu- per the new definition, 77 firms are medium enterprises,
lative distribution function (CDF) as: 112 firms are small enterprises, and 36 firms are micro
enterprises. It indicates that with the revised definition
some large firms have become eligible to be categorized as
MSMEs and avail of benefits proposed for the revival and
growth of the MSMEs sector.
Where, = no. of firms, = probability that an event Similar findings have been observed by other studies
occurs given the values of variables , = standard normal based on CMIE data (Nagaraj & Vaibhav, 2020) and the ASI
variable, and = standard normal CDF, which can be esti- database (Sharma, 2022). Given the high informality in the
mated as; MSME sector, particularly the micro enterprises, the ben-
efits of the schemes designed to support MSMEs are pri-
marily availed by medium and small enterprises which rep-
As denotes the probability of success, it is computed by resent less than one percent of firms among MSMEs. It is
the area of the standard CDF curve from to . Since easier for government agencies to meet the target by lend-
therefore, is called a probit function. ing support to a few larger firms in place of smaller firms.
It makes micro enterprises less preferred beneficiaries of
Results and Discussion the MSME schemes by the lending institutions. Therefore,
Impact of Change in Definition on MSMEs the revision in the definition may be more supportive for
medium and small firms, which also includes a few large
One of the major policy initiatives for the MSME sector enterprises which have now become MSMEs, at least in the
under the ‘Atmanirbhar Bharat’ package, announced in May short term, particularly during the pandemic and revival
2020, was a revision in the definition of MSMEs. Under new phase. Later, it may encourage smaller firms, i.e., micro en-
composite criteria, MSMEs have been defined in terms of terprises, to scale up without losing their MSME category.
turnover excluding export, and investment in plant, ma-
chinery, and equipment. Apart from including turnover as Impact of Lockdown on Business Activities
an additional criterion for defining MSMEs, another impor-
To curb the spread of the Covid-19 virus, the government
tant deviation from the old definition is increasing the in-
introduced a sudden and strict lockdown on 25th March
vestment (in plant and machinery, and equipment) limits
2020 with some relaxation for essential activities. It con-
for each category of MSMEs and having the same criteria
tinued up to 31st May 2020 and then removed gradually af-
for manufacturing and service activities (Table 1). Another
ter 1st June 2020. The implemented policy of lockdown dis-
significant feature of the composite criteria is the value of
rupted all economic activities across the country. Among
turnover excluding export will be considered for defining
MSMEs under study, around 29 percent of firms reported
MSMEs. Therefore, it will encourage MSMEs to export
that their businesses collapsed due to the lockdown as de-
more.
picted in Table 3. The reported results show that firms were
The increase in investment limit in plant and machinery,
facing dual shocks in terms of paucity of raw materials and
and equipment has a significant impact on the graduation
collapse of the market for the final output. The highest im-
of enterprises among their categories – i.e., micro, small,
pact was on the decrease in demand (53 percent) followed
medium, and large. Further, an increase in turnover can al-
by the supply of raw materials (36 percent) and the collapse
low the realization of economies of scale in the MSMEs sec-
of businesses (29 percent). Interestingly, around 4 percent
tor and thus make them more competitive and economi-
of firms reported that their demand had increased.
cally viable. Out of 225 firms, 87.11 percent of firm owners
More than 90 percent of the sample firms reported that
believed that the revised definition of MSMEs is beneficial
their turnover decreased in 2020-21 as shown in Table 4.
for the sector while the remaining 12.89 percent of firms
Remarkably, around 3 percent of firms reported that their
said that they are uncertain about its implication. In the
turnover increased, and the rest of the 7 percent of firms
views of those who find it beneficial, the revised definition
reported that there was no change in their turnover during
will allow them to increase investment level, firm size i.e.,
the period. These enterprises were engaged in human
employment level, and output level, and encourage them
health activities and the manufacture of wearing apparel.
to export more without losing their firm’s categorization as
Nearly 53 percent of firms reported more than a 50 percent
MSMEs.
decline in their turnover. It indicates the severity of busi-
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Table 1. Revision in MSMEs Definition
MSME Composite Criteria of New MSME Definition, June 2020 Criteria of Old MSME Definition, MSMED
Category Act 2006
Investment Turnover Investment
(In plant and machinery, and (In plant and machinery, and equipment)
equipment)
Manufacturing Service Activities
Activities
Micro <= INR 10 million <= INR 50 million <= INR 2.5 million <= INR 1 million
Enterprises
Small > INR 10 million & > INR 50 million & > INR 2.5 million & > INR 1 million &
Enterprises <= INR 100 million <= INR 500 million <= INR 50 million <= INR 20 million
Medium > INR 100 million & > INR 500 million & > INR 50 million & > INR 20 million &
Enterprises <= INR 500 million <= INR 2500 million <= INR 100 million <= INR 50 million
Note: Notification by the Ministry of MSMEs, Government of India dated 26 June 2020 and MSME Development Act 2006.
Table 2. Implications of Change in Definition of MSMEs
MSME Definition Criteria
MSME Categories New Criteria Old Criteria Percentage Change in Number
36 0
Micro Enterprises (16.00) (0.00) 16.00
112 125
Small Enterprises (49.78) (55.56) -5.78
77 39
Medium Enterprises (34.22) (17.33) 16.89
0 61
Large Enterprises (0.00) (27.11) -27.11
225 225
Total (100.00) (100.00)
Source: Primary survey, computed by the author. Note: In parenthesis, the percentage of the firms that exist under each category has been depicted.
Table 3. Impact of Lockdown on Firms Among MSMEs under study, the highest decline in
turnover was observed in small and micro enterprises
Percent of Total around 60.75 percent and 43.47 percent respectively as re-
Impact of lockdown on firms Firms ported in Table 5. In the case of medium enterprises, the
No Demand/Collapse of Businesses 29.33 range of percentage change in turnover is -80.00 to 25.00.
Production & Distribution Activities It indicates that despite an average 32 percent reduction in
Closed 10.67 turnover of medium enterprises under study, some of these
Decrease in Production Activities 29.33 enterprises observed an increase or no change in turnover
Ordered canceled 7.11
in 2020-21. It is consistent with the findings of Table 4
which shows that around 10 percent of firms under study
Decrease in Demand 52.89
have observed either an increase or no change in turnover.
Reduction in Export 14.22 Such enterprises were engaged in human health activities
Increase in Demand 3.56 and the manufacture of wearing apparel. Further, owners of
Delay in payments 17.33 these enterprises reported that they tried to quickly adopt
an e-commerce platform and they had some savings to in-
Erratic supply of Raw materials 36.44
vest for the purpose. Some enterprises switched to other
Decrease in imported raw materials 13.78
economic activities such as the production of masks, san-
Increase in price of raw materials 17.33 itizers, home delivery of their products, etc. It shows that
these firms had flexibility in their production process and
Source: Primary Survey, computed by the author.
had the resources needed for it, particularly financial re-
sources. It infers a very important lesson for enhancing
ness disruptions caused by the lockdown. Our findings are the resilience of MSMEs. Few other studies have also high-
consistent with the results of other studies assessing the lighted that firm with stronger cash positions (Roper &
impact of the pandemic on the performance of MSMEs Turner, 2020), with an adaptation of digital technology (Ak
(Rathore & Khanna, 2020; Shafi et al., 2020; Tairas, 2020; pan et al., 2020; Gregurec et al., 2021; Papadopoulos et al.,
Wijaya, 2020). 2020), and with the utilization of e-commerce and social
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Table 4. Impact on Turnover
Impact on Turnover No. of Firms Percent of Total Firms
Decrease in turnover 203 90.22
Up to 25 percent decline in turnover 38 16.89
Between 26-50 percent decline in turnover 46 20.44
Between 51-75 percent decline in turnover 90 40.00
More than 75 percent decline in turnover 29 12.89
Increase in turnover 7 3.11
No change in turnover 15 6.67
Source: Primary Survey, computed by the author.
Table 5. Average Change in Turnover of MSMEs (in percent)
Average Change Standard Deviation Min. Value Max. Value
Micro Enterprises -43.47 20.10 -75.00 -20.00
Small Enterprises -60.75 20.86 -87.50 -16.67
Medium Enterprises -31.91 32.02 -80.00 25.00
Source: Primary Survey, computed by the author.
Table 6. Impact of Covid-19 on Types of Employment
Type of Workers No. of Persons Employed Change
(In percent)
2019-20 2020-21
Family Workers 452 474 4.87
Formal Workers 12635 14225 12.58
Informal Workers 21675 11455 -47.15
Total Workers 34762 26154 -24.76
Source: Primary Survey, computed by the author.
media platforms (Purba et al., 2021; Suwarni & Handayani, due to lockdown and containment measures. Other studies
2021) sustain their business during and after the pandemic. have also observed the plight of workers in India due to
the lockdown (Srivastava, 2020). However, some of the in-
Impact of Pandemic on Employment formal workers were available for work near the worksite
at a higher daily wage as wages had increased due to the
In MSMEs under study, 34,762 persons were employed in shortage of workers. To meet the business commitments,
2019-20, which reduced to 26,154 persons in 2020-21 indi- orders taken before lockdown, or fresh orders coming dur-
cating a decline of around 25 percent in employment due ing lockdown, firm owners offered them formal employ-
to the pandemic and lockdown (Table 6). The employment ment at relatively lower formal wages. Further, the gov-
1
of informal workers was reduced by 47.15 percent. Surpris- ernment was willing to contribute 24 percent of employee
ingly, employment of formal workers and family workers provident funds (EPF) of employees, i.e., full contribution
increased during the period by nearly 5 percent and 12.58 of share of both employee and employer in the EPF account,
percent respectively. for a few months during the pandemic. For firms, it was
During the interaction, most of the firm owners reported the need of the hour to employ few formal employees and
that there was uncertainty about reopening the economic meet the commitment during the pandemic. Overall, this
activities after the lockdown was imposed. It caused a mas- arrangement was beneficial for both – the workers and the
sive plight of informal workers from their workplaces. A employers. Workers got certainty in employment with other
huge number of informal workers return to their homes benefits while employers got committed employees. Out of
1 Information about formal and informal workers was directly asked. In this study, workers are formal if they receive social security bene-
fits while workers are informal if they don’t receive any social security benefits.
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
a total of 225 firms, around 49 percent of firms reported firm owners (Table 7). We observed that there is a high level
an increase in formal employment. However, such employ- of awareness about the government schemes among the
ment was very few in each firm. These enterprises primarily firm owners under study. It may be because all firms under
belong to medium and small enterprises. study were registered firms. Certainly, it might not be true
The increase in formal employment during the pandemic for unregistered MSMEs representing a large fraction of the
is an unusual phenomenon in the labour market. The main sector. Further, young and educated persons were operat-
reasons for hiring formal workers include the plight of in- ing the majority of these small firms under study. Moreover,
formal workers, the requirement for meeting business com- in terms of receiving benefits, their performance was not
mitments, and workers are available at low formal wages. very impressive. However, those who have received bene-
Although the share of formal employment is less in the to- fits under any schemes were found to be highly satisfied.
tal employment of MSMEs, this phenomenon highlights a It indicates that hypothesis 1 - the supportive measures of
few important things. There is a higher level of trust and government have increased firms’ resiliency and helped to
commitment between employer and employee in the case attain sustainable growth – can be accepted.
of formal employment. It also indicates that with the gov- Relaxation in interest payments and working capital
ernment’s incentives, formal employment in the MSME sec- support for the MSMEs during and after the pandemic were
tor can be promoted. much needed. However, most of the firm owners reported
that these support measures might only help in the survival
Challenges in Business Revival of firms, save them to close permanently, and support them
to stay in business. Further, these supports were too small
As reported by the firm owners, major challenges in to handle the financial challenges of the large and diver-
business revival include paucity of working capital, lack of sified MSME sector with huge dominance of informality.
skilled workers, disrupted supply of raw materials, and de- In their views, mere announcements would not help in re-
ficiency of demand. Among these issues, the problem of viving the MSME sector. Their implementation with trans-
working capital was the biggest one for the firm owners parency was more needed for its revival. Government
due to an increase in inventory and delayed payment. In should have been aggressive in its approach to implement
this regard, the government should continue policy initia- these announcements properly. The sudden lockdown im-
tives taken under ‘Atmanirbhar Bharat’ for a long time until position was highly damaging for the businesses. They sug-
the MSMEs sector becomes able to cover its cost of produc- gested that Government should accelerate the pace of re-
tion or achieve its breakeven point or the business envi- viving the market at any cost via financial, technical, and
ronment become normal. Further, the government should marketing instruments. Further, these support measures
strictly implement the policy of 25 percent procurement would have been more helpful to the business if the gov-
from MSMEs. As stated by the firm owners the plight of ernment would have focused more on the revival of the de-
labourers led to a shortage of workforce for the MSME sec- mand for products and services. Therefore, views obtained
tor. It also affected the efficiency of the existing workforce from owners of MSMEs under study emphasize that policy
at the workplace. Although some workers were available measures during business uncertainties caused by external
for employment, the majority of them lacked the required shocks such as the pandemic should focus on addressing
skills. Further, available workers were demanding higher both demand and supply side challenges along with consid-
wages, which led to increased labour costs. ering the diversity and informality of the sector.
Reduction in the supply of raw materials had enhanced
disruption in supply chains, which originated due to lock- Probit Regression Analysis Results
down and restrictions on mobility. Because of hoarding,
raw materials were available at a higher price which re- A regression analysis was conducted to understand if
duced production further. Hoarding and cartel should be re- there is any statistically significant relationship between
stricted properly. In some cases, the quality of raw materi- the negative impact of COVID-19 and firm size, investment,
als was also an issue. and age of the firm. The results of the regression analysis
With the gradual relaxation in the lockdown, the econ- are shown in Table 8. The coefficients of explanatory vari-
omy started showing signs of improvement. However, com- ables – firm size (measured in terms of the number of work-
mercial demand for products and services was very low. In ers), investment level (measured in terms of investment in
view of some firm owners, it may take at least two to three plant and machinery and equipment), and firm’s age are
years to achieve the level of January 2020. Uncertainty in negative (i.e., -0.004, -0.575, and -0.561 respectively) and
the market and low demand were serious challenges in the statistically significant (i.e., 1 percent, 1 percent, and 10
revival of the sector. It also affected the borrowing of firms percent respectively). These findings also show that hy-
from banks for new investments. potheses 2, 3, and 4 are accepted. It indicates that larger
firms in terms of employment and investment, and older
Efficacy of Government Policies firms have a lesser possibility to be affected by external
shocks. It also infers that smaller and younger firms need
To measure the efficacy of government schemes during more policy attention during a pandemic, external shocks,
the pandemic, the questions about the awareness of or business uncertainties.
schemes benefits received and whether satisfied or not for
the selected 10 government schemes have been asked to the
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Table 7. Efficacy of government schemes
Awareness level Benefits Received Satisfied
S. No. Name of Government Schemes ( % of total firms (% of firms having (% of benefits
having awareness) awareness) received)
Prime Minister Employment Generation 218 136 106
1
Programme (PMEGP) (96.89) (62.39) (77.94)
Credit Guarantee Trust Fund for Micro & 211 115 83
2
Small Enterprises (CGT SME) (93.78) (54.50) (72.17)
204 90 30
3 Government e-Marketplace
(90.67) (44.12) (100.00)
Procurement and Marketing Support Scheme 169 123 8
4
(P&MS) (75.11) (72.78) (6.50)
TReDS (Trade Receivables electronic 190 71 8
5
Discounting System) (84.44) (37.37) (11.27)
225 194 186
6 MSME59
(100.00) (86.22) (95.88)
211 16 8
7 MUDRA Yojana
(93.78) (7.58) (50.00)
Distress Asset Fund –Subordinate Debt 225 141 125
8
Scheme for MSMEs (100.00) (62.67) (88.65)
Rescheduling of Payments – Term Loans and 225 225 132
9
Working Capital Facilities (100.00) (100.00) (58.76)
225 179 103
10 Initiatives under Atmanirbhar Bharat
(100.00) (79.56) (57.54)
Source: Primary Survey, Computed by the Author. Note: In parenthesis, the percentage of the firms has been shown at the awareness level, at the benefits receiving level, and at the
satisfaction level.
Table 8. Results of Probit Regression Analysis
Independent variables Coefficient Standard Error Z p>z
Firm Size - 0.004* 0.001 - 4.91 0.000*
Investment - 0.575* 0.015 - 3.91 0.000*
Firm’s Age - 0.561** 0.317 -1.77 0.077**
Pseudo R2 0.513 (0.000)*
Source: Computed by the author. Note: * and ** denote significance at 1% and 10% levels, respectively. The significance of the model has been shown in parentheses.
Conclusion and Policy Recommendations of workers, loan and repayments issues, lack of finances
for investment in new opportunities, lack of demand for
This study examines the impact of COVID-19 on MSMEs products and services, huge disruptions in the supply of
in India and assesses the efficacy of the policy measures raw materials and increase in the cost of production. How-
to revive this sector. The study also suggests ways for pro- ever, firms that quickly adopted e-commerce platforms and
moting resilient and sustained growth for the sector. It is had some savings to invest for this purpose were able to
based on the primary survey of 225 small firms located in maintain their previous performance level or experienced
Dehradun and the NCR region engaged in both manufac- an increase in turnover. Some enterprises switched to other
turing and service activities. The study shows that the pan- activities such as the production of masks, sanitizer, and
demic and lockdown have severely affected the MSME sec- home delivery of products. Therefore, firms that have fi-
tor. The business of one-third of firms collapsed while more nancial resources, and flexibility to adopt a new business
than half of the firms faced a demand reduction. Other im- model and explore new business opportunities may survive
pacts on small firms include the erratic supply of raw ma- and maintain their growth during economic shocks. This is
terials, cancellations of previous orders, delay in payments, also verified by the results of regression analysis.
reduction in trade, increase in the price of raw materials With the revised definition, some large firms have be-
and production costs and decrease in production activi- come eligible to be categorized as MSMEs and avail of ben-
ties. The employment in firms under study was reduced by efits meant for the revival and growth of the MSME sector.
around 25 percent. The workers, who lost their jobs, were However, for the majority of firms under study, revision in
mainly engaged in informal employment. the definition of MSMEs is beneficial for them. The revised
Major challenges faced by firms in their revival include definition allows firms to increase their size and increase
issues about working capital, delayed payments, shortage
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
output level along with availing the benefits of MSME sup- vealed the utter inadequacy of policy framework to support
porting schemes with more investment and more turnover. the vulnerable sections of the economy during policy
It will also promote export. An increase in investment can shocks and uncertain business environments. COVID-19 is
increase the productivity and competitiveness of a firm neither the first pandemic nor it is going to be the last.
without losing its MSME categorization. Further, an in- The world has witnessed around five other pandemics dur-
crease in turnover can allow the realization of economies of ing the first two decades of this century viz. Severe Acute
scale in the MSMEs sector. Respiratory Syndrome (SARS) in 2002-03, H1N1 influenza
A high level of awareness about government schemes in 2009, Swine Influenza in 2009, Middle East Respiratory
has been found among firms under study. It may be because Syndrome (MERS) in 2009, and ZIKA virus 2015-16. How-
all firms under study were registered firms and were oper- ever, COVID-19, the worst among these, has infected an es-
ated by young and educated persons. Moreover, in terms timated 500 million people and killed around 20-50 mil-
of receiving benefits, their performance was not very im- lion people (Sarma & Sunder, 2022). Scientists believe that
pressive. There is a need to increase the awareness level of climate change; particularly global warming may activate
firms. several dormant viruses and cause similar pandemics/epi-
demics in the future.
Lessons from the Pandemic Apart from pandemics and epidemics, several other fac-
tors including abrupt government policies, wars, floods,
The world has entered the third year of the pandemic. drought, etc. may cause business uncertainties and affect
It has given long-lasting effects on many dimensions of small businesses. Although business uncertainties affect all
life. The economy has started showing recovery despite the types of firms, larger firms are better equipped to face such
third wave of the pandemic. However, there is huge unem- challenges with their financial resources and plans to ad-
ployment and small firms are still struggling to survive and dress such situations (Rebmann et al., 2013) while small
achieve sustained growth. The pandemic is neither the new firms lack the resources to face such shocks (Watkins et
one nor the last one. Many scientists have suggested that al., 2008). Further, the majority of MSMEs are in the in-
due to increasing climate change and global warming, there formal sector, which makes it difficult even for the govern-
might be more pandemics and natural disasters in the fu- ment to help them (Sharma, 2022). Therefore, large frac-
ture. Further, humanity may face many man-made disasters tions of MSMEs are at a high risk of shutting down their
(e.g., war) or economic shocks (e.g., financial crises). There businesses after a large-scale external shock (Rebmann et
is a strong need to learn lessons from this pandemic. Based al., 2013; Schrank et al., 2013). Lack of financial resources
on our interaction with owners of small firms and the above is the biggest challenge in the recovery of small businesses
discussion, the following lessons can be learned for the re- (Cumbie, 2007; Farrell & Wheat, 2016). Therefore, there is
silient and sustained growth of the MSME sector: a need to develop a mechanism for small businesses, which
1. The Pandemic has generated both demand and sup- may rescue them from shutting down their businesses and
ply shocks. Merely financial assistance to small busi- support their revival during business uncertainties caused
nesses may help them to survive but for revival and by a large-scale economic shock.
sustained growth, the government should focus on The above discussion and our interaction with owners of
enhancing demand also. firms highlighted that although demand and services were
2. The resilience of a firm depends upon its financial re- scarce during the pandemic, they struggled to retain their
sources and ability to invest in new technologies or all-work force due to a lack of financial resources and de-
business opportunities. layed payment. Even they were not able to invest in new
3. In general, MSMEs lack financial and human re- business opportunities or equipment due to a lack of finan-
sources. Unlike small firms, large firms have financial cial resources. It emphasizes the need for a provision of an
planning for economic shocks and business uncer- emergency fund for MSMEs. With our limited knowledge,
tainties. There is a need to encourage and train small we propose two models to address this issue – (i) Uncer-
firms to plan for business uncertainties. tainty Corpus Fund for MSMEs, and (ii) Small Business In-
4. There is a need to promote the registration of small surance.
firms. Registered firms have a better awareness of
government schemes and access to them. Uncertainty Corpus Fund for MSMEs
2
Planning for Enhancing Resilience of the MSME Like Public Provident Fund (PPF), government can initi-
Sector for Future Economic Shocks ate Uncertainty Corpus Fund for Small Businesses (UCFSB).
MSMEs should be encouraged to save and invest in it. This
The pandemic has exposed the vulnerability of small fund can be used to meet the financial needs of small firms
businesses and weaker sections of society. It has also re- during business uncertainties. It can also be linked with the
2 In India, Public Provident Fund was introduced in 1968 to mobilize small savings in the form of investment, coupled with a return on it.
The interest earned and the returns are not taxable under Income Tax Act. Therefore, it is a savings-cum-tax saving investment vehicle
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
turnover of the firms – like a firm should maintain a cer- Theoretical Implications
tain fraction of their turnover, say 1 percent for example, in
the uncertainty corpus fund. With this, it would be a forced This study addressed the issue of resilience and sustain-
saving, but it would be highly useful for small businesses ing the growth of MSMEs during and after the COVID-19
during business uncertainties caused by economic shocks. pandemic. The study tried to get the solutions to these is-
The government may encourage small businesses by assur- sues from the lens of contingency theory. The results of
ing a lucrative return on the investment through such type this study may support supplementing the literature re-
of corpus funds. lated to contingency theory. Further, the results of the cur-
rent study validate that in the situation of crisis experience
Small Business Insurance Scheme and size of the firm do matter.
Like term insurance of a person, insurance schemes for Limitations and Future Research
small businesses can be initiated that can be named – Small
Business Insurance Scheme. There are more than 63.4 mil- Like any other study, the present study is also not free
lions MSMEs in the country. If framed properly, it has huge from limitations. First, this study includes only registered
market potential for the insurance sector. The government MSMEs while a larger number of MSMEs belong to the un-
may encourage MSMEs in paying their premium by bearing registered category. Second, most of the MSMEs in India
a part of its financial burden. Given the large number of fall in the category of micro enterprises while in our sample
MSMEs, the government may target small businesses, par- the least representation is from the micro category. Finally,
ticularly micro and own-account enterprises, up to a certain the sample of the present study was restricted to north In-
level of turnover. dia only. Therefore, future research should have to con-
These two financial instruments may become part of fi- sider the rest of the part of the country also and weightage
nancial planning for small firms, which they lack in com- should have to be given to any category of MSMEs in a sam-
parison to large firms. Small firms can use such funds for ple based on their proportion in total MSMEs number to
meeting working capital requirements and investment pur- overcome these limitations. Additionally, the future study
poses at the time of need, particularly during uncertain should also consider the personality traits of the entrepre-
business environments caused by policy or natural shocks. neurs along with the discussed variables of this study to in-
It may also be a great help for the government in times of crease the applicability of the findings further.
crisis. The government may focus on addressing demand is-
sues which is the biggest challenge faced by MSMEs during Submitted: September 03, 2022 CDT, Accepted: December 30,
an external shock such as the pandemic. 2022 CDT
This is an open-access article distributed under the terms of the Creative Commons Attribution 4.0 International License
(CCBY-4.0). View this license’s legal deed at http://creativecommons.org/licenses/by/4.0 and legal code at http://creativecom-
mons.org/licenses/by/4.0/legalcode for more information.
that enables one to build a corpus for long-run financial needs. It is a government-backed scheme and one of the best investment op-
tions for a person with a low-risk appetite. It offers guaranteed returns to protect the investment need of the people.
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
References
Aftab, R., Naveed, M., & Hanif, S. (2021). An analysis of Ernst & Young. (2020). Managing the impact of
Covid-19 implications for SMEs in Pakistan. Journal of COVID-19 on India’s supply chains: Now, next and
Chinese Economic and Foreign Trade Studies, 14(1), beyond. https://assets.ey.com/content/dam/ey-sites/e
74–88. https://doi.org/10.1108/jcefts-08-2020-0054 y-com/en_in/topics/government-and-public-sector/20
Akpan, I. J., Soopramanien, D., & Kwak, D. H. (2020). 20/09/managing-the-impact-of-covid-19-on-india-su
Cutting-edge technologies for small business and pply-chains.pdf
innovation in the era of the COVID-19 global health Farrell, D., & Wheat, C. (2016). Cash is King: Flows,
pandemic. Journal of Small Business & Balances, and Buffer Days Evidence from 600,000 Small
Entrepreneurship, 1–11. Businesses. JPMorgan Chase & Co Institute. https://ss
Bartik, A. W., Bertrand, M., Cullen, Z. B., Glaeser, E. L., rn.com/abstract=2966127
Luca, M., & Stanton, C. T. (2020). How are small Fiedler, F. E. (1951). A method of objective
businesses adjusting to COVID-19? Early evidence from quantification of certain countertransferance
a survey (No. w26989). National Bureau of Economic attitudes. Journal of Clinical Psychology, 7(2), 101–107.
Research. https://doi.org/10.3386/w26989 https://doi.org/10.1002/1097-4679(195104)7:2
Bekaert, G., Engstrom, E., & Ermolov, A. (2020). Gregurec, I., Tomičić Furjan, M., & Tomičić-Pupek, K.
Aggregate demand and aggregate supply effects of (2021). The impact of COVID-19 on sustainable
Covid-19: A real-time analysis. Finance and business models in SMEs. Sustainability, 13(3), 1098.
Economics Discussion Series, 2020(049). https://doi.or https://doi.org/10.3390/su13031098
g/10.17016/feds.2020.049 Guerrieri, V., Lorenzoni, G., Straub, L., & Werning, I.
Boso, N., Danso, A., Leonidou, C., Uddin, M., Adeola, (2020). Macroeconomic implications of COVID-19: Can
O., & Hultman, M. (2017). Does financial resource negative supply shocks cause demand shortages? (No.
slack drive sustainability expenditure in developing w26918). National Bureau of Economic Research. htt
economy small and medium-sized enterprises? ps://doi.org/10.3386/w26918
Journal of Business Research, 80, 247–256. https://do Haleem, A., Javaid, M., & Vaishya, R. (2020). Effects of
i.org/10.1016/j.jbusres.2017.06.016 COVID-19 pandemic in daily life. Current Medicine
Burton, D., Confield, E., Gasner, M. R., & Weisfuse, I. Research and Practice, 10(2), 78–79. https://doi.org/1
(2011). A qualitative study of pandemic influenza 0.1016/j.cmrp.2020.03.011
preparedness among small and medium-sized Hutchinson, K., Fergie, R., Fleck, E., Jouflas, G., &
businesses in New York City. Journal of Business Parry, Z. (2021). Flexing the Leadership Muscle: An
Continuity and Emergency Planning, 5(3), 267–279. International Study of Entrepreneurial Resilience in
Cacciapaglia, G., Cot, C., & Sannino, F. (2020). Mining Rural Communities During the COVID-19 Pandemic.
Google and Apple mobility data: Twenty-one shades of Journal of Small Business Strategy, 31(4), 100–112. htt
European social distancing measures for COVID-19. ps://doi.org/10.53703/001c.29484
Cepel, M., Gavurova, B., Dvorský, J., & Belas, J. (2020). Jena, R. K. (2022). Understanding and Predicting Indian
The impact of the COVID-19 crisis on the perception Restaurant Owners’ Intention to Continue Business
of business risk in the SME segment. Journal of in Post-COVID-19 Pandemic Lockdown. Journal of
International Studies, 13(3), 248–263. https://doi.org/ Small Business Strategy, 32(1), 34–47. https://doi.org/
10.14254/2071-8330.2020/13-3/16 10.53703/001c.32409
Cumbie, B. A. (2007). Disaster Recovery Practices in Juergensen, J., Guimón, J., & Narula, R. (2020).
Small Business: A Delphi Study of Factors Affecting European SMEs amidst the COVID-19 crisis:
Adoption. SAIS 2007 Proceedings. Paper, 23. assessing impact and policy responses. Journal of
Davidsson, P., & Gordon, S. R. (2016). Much ado about Industrial and Business Economics, 47(3), 499–510. htt
nothing? The surprising persistence of nascent ps://doi.org/10.1007/s40812-020-00169-4
entrepreneurs through macroeconomic crisis. Kuebart, A., & Stabler, M. (2020). Infectious diseases as
Entrepreneurship Theory and Practice, 40(4), 915–941. socio‐spatial processes: The Covid‐19 outbreak in
https://doi.org/10.1111/etap.12152 Germany. Tijdschrift voor economische en sociale
del Rio-Chanona, R. M., Mealy, P., Pichler, A., Lafond, geografie, 111(3), 482–496. https://doi.org/10.1111/te
F., & Doyne Farmer, J. (2020). Supply and demand sg.12429
shocks in the COVID-19 pandemic: An industry and Lemi, K., Bogale, M., & Mengesha, W. (2020). The Effect
occupation perspective. Oxford Review of Economic of COVID-19 on Micro, Small, and Medium
Policy, 36(S1), S94–S137. https://doi.org/10.1093/oxre Enterprises’ Operation in Ethiopia. Horn of African
p/graa033 Journal of Business and Economics (HAJBE), 10–17.
Donaldson, L. (2001). The contingency theory of Lonergan, M., & Chalmers, J. D. (2020). Estimates of the
organizations. SAGE Publications, Inc. https://doi.org/ ongoing need for social distancing and control
10.4135/9781452229249 measures post-“lockdown” from trajectories of
Donaldson, L. (2006). The contingency theory of COVID-19 cases and mortality. Eur Respir J. In press.
organizational design: challenges and opportunities. https://doi.org/10.1183/13993003.01483-2020)
Information and Organization Design Series, 19–40. htt
ps://doi.org/10.1007/0-387-34173-0_2
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Lu, Y., Wu, J., Peng, J., & Lu, L. (2020). The perceived Ratnasingam, J., Khoo, A., Jegathesan, N., Wei, L. C., Ab
impact of the Covid-19 epidemic: evidence from a Latib, H., Thanasegaran, G., Choon Liat, L., Yan Yi,
sample of 4807 SMEs in Sichuan Province, China. L., Othman, K., & Amir, Mohd. A. (2020). How are
Environmental Hazards, 19(4), 323–340. https://doi.or small and medium enterprises in Malaysia’s furniture
g/10.1080/17477891.2020.1763902 industry coping with COVID-19 pandemic? Early
Martin, S. L., Javalgi, R. G., & Ciravegna, L. (2020). evidences from a survey and recommendations for
Marketing capabilities and international new venture policymakers. BioResources, 15(3), 5951–5964. http
performance: The mediation role of marketing s://doi.org/10.15376/biores.15.3.5951-5964
communication and the moderation effect of Rebmann, T., Wang, J., Swick, Z., Reddick, D., &
technological turbulence. Journal of Business delRosario, J. L., Jr. (2013). Business continuity and
Research, 107, 25–37. https://doi.org/10.1016/j.jbusre pandemic preparedness: US health care versus non-
s.2019.09.044 health care agencies. American Journal of Infection
McCall, B. (2020). COVID-19 and artificial intelligence: Control, 41(4), e27–e33. https://doi.org/10.1016/j.aji
Protecting health-care workers and curbing the c.2012.09.010
spread. Lancet Digital Health, 2(4), 166–167. https://d Reed, J. (2021). Strategic agility in the SME: Use it
oi.org/10.1016/s2589-7500(20)30054-6 before you lose it. Journal of Small Business Strategy,
Nagaraj, R., & Vaibhav, V. (2020). Revising the 31(3), 33–46. https://doi.org/10.53703/001c.29734
definition of MSMEs: Who is likely to benefit from it? Roper, S., & Turner, J. (2020). R&D and innovation after
The Indian Journal of Labour Economics, 63(S1), COVID-19: What can we expect? A review of prior
119–126. https://doi.org/10.1007/s41027-020-0026 research and data trends after the great financial
6-x crisis. International Small Business Journal, 38(6),
Nicola, M., Alsafi, Z., Sohrabi, C., Kerwan, A., Al-Jabir, 504–514. https://doi.org/10.1177/0266242620947946
A., Iosifidis, C., Agha, M., & Agha, R. (2020). The Sarma, A., & Sunder, S. (2022). Pressing Issues before
socio-economic implications of the coronavirus Budget 2022-23. Mainstream, LX(6). http://mainstrea
pandemic (COVID-19): A review. International Journal mweekly.net/article12005.html
of Surgery, 78, 185–193. https://doi.org/10.1016/j.ijs Schrank, H. L., Marshall, M. I., Hall-Phillips, A., Wiatt,
u.2020.04.018 R. F., & Jones, N. E. (2013). Small-business demise
Nordhagen, S., Igbeka, U., Rowlands, H., Shine, R. S., and recovery after Katrina: rate of survival and
Heneghan, E., & Tench, J. (2021). COVID-19 and demise. Natural Hazards, 65(3), 2353–2374. https://d
small enterprises in the food supply chain: Early oi.org/10.1007/s11069-012-0480-2
impacts and implications for longer-term food system Shafi, M., Liu, J., & Ren, W. (2020). Impact of COVID-19
resilience in low- and middle-income countries. pandemic on micro, small, and medium-sized
World Development, 141, 105405. https://doi.org/10.1 enterprises operating in Pakistan. Research in
016/j.worlddev.2021.105405 Globalization, 2, 100018. https://doi.org/10.1016/j.res
OECD. (2020). Tackling Coronavirus (COVID-19): SME glo.2020.100018
policy responses. https://www.oecd.org/coronavirus/p Sharma, A. K. (2022). Implications of policy initiatives
olicy-responses/coronavirus-covid-19-sme-policy-res for MSMEs amidst economic disruptions caused by
ponses-04440101/ Covid-19. Vikalpa: The Journal for Decision Makers,
Papadopoulos, T., Baltas, K. N., & Balta, M. E. (2020). 47(1), 7–18. https://doi.org/10.1177/02560909221078
The use of digital technologies by small and medium 460
enterprises during COVID-19: Implications for theory Sigurdsson, V., Larsen, N. M., Sigfusdottir, A. D.,
and practice. International Journal of Information Fagerstrøm, A., Alemu, M. H., Folwarczny, M., &
Management, 55, 102192. https://doi.org/10.1016/j.iji Foxall, G. (2020). The relationship between the firm’s
nfomgt.2020.102192 social media strategy and the consumers’
Prasad, S., Su, H. C., Altay, N., & Tata, J. (2015). engagement behavior in aviation. Managerial and
Building disaster-resilient micro enterprises in the Decision Economics, 41(2), 234–249. https://doi.org/1
developing world. Disasters, 39(3), 447–466. https://d 0.1002/mde.3052
oi.org/10.1111/disa.12117 Singh, M., Kumar, P., & Rathi, R. (2019). Modelling the
Purba, M. I., Simanjutak, D. C. Y., Malau, Y. N., barriers of Lean Six Sigma for Indian micro-small
Sholihat, W., & Ahmadi, E. A. (2021). The effect of medium enterprises: An ISM and MICMAC approach.
digital marketing and e-commerce on financial The TQM Journal, 31(5), 673–695. https://doi.org/10.1
performance and business sustainability of MSMEs 108/tqm-12-2018-0205
during COVID-19 pandemic in Indonesia. Srivastava, R. (2020). Labour migration, vulnerability,
International Journal of Data and Network Science, and development policy: The pandemic as inflexion
5(3), 275–282. https://doi.org/10.5267/j.ijdns.202 point? The Indian Journal of Labour Economics, 63(4),
1.6.006 859–883. https://doi.org/10.1007/s41027-020-0030
Rathore, U., & Khanna, S. (2020). From Slowdown to 1-x
Lockdown: Effects of the COVID-19 Crisis on Small Suwarni, E., & Handayani, M. A. (2021). Development
Firms in India. SSRN Electronic Journal. https://doi.or of Micro, Small and Medium Enterprises (MSME) to
g/10.2139/ssrn.3615339 Strengthen Indonesia’s Economic Post COVID-19.
Business Management and Strategy, 12(2), 19–34. http
s://doi.org/10.5296/bms.v12i2.18794
Journal of Small Business Strategy
Understanding the Impact of Covid-19 on MSMEs in India: Lessons for Resilient and Sustained Growth of Small Firms
Tairas, D. R. (2020). COVID-19 pandemic and MSMEs: Watkins, T. A., Jean Russo, M., & Ochs, J. B. (2008). Can
impact and mitigation. Jurnal Ekonomi Indonesia, students in technology entrepreneurship courses
9(1), 67–80. https://doi.org/10.52813/jei.v9i1.48 help foster start-ups by the unemployed? Journal of
Thomas, G. H., & Douglas, E. J. (2021). Small firm Small Business and Enterprise Development, 15(2),
survival and growth strategies in a disrupted 348–364. https://doi.org/10.1108/1462600081087172
declining industry. Journal of Small Business Strategy, 7
31(5), 22–37. https://doi.org/10.53703/001c.29814 Wijaya, O. Y. A. (2020). The impact of covid-19 on
Vizcaíno, F. V., Martin, S. L., Cardenas, J. J., & micro, small and medium enterprises (MSMEs) in
Cardenas, M. (2021). Employees’ attitudes toward East Java province, Indonesia and strategies for
corporate social responsibility programs: The overcoming: Ad interim. Talent Development &
influence of corporate frugality and polychronicity Excellence, 12(2), 3454–3469.
organizational capabilities. Journal of Business Xu, J., & Long, J. S. (2005). Confidence intervals for
Research, 124, 538–546. https://doi.org/10.1016/j.jbus predicted outcomes in regression models for
res.2020.11.016 categorical outcomes. The Stata Journal, 5(4),
537–559. https://doi.org/10.1177/1536867x050050040
5
Journal of Small Business Strategy
File and source
- File
- sharma-2023-understanding-the-impact-of-covid-19-on-msmes-in-india-lessons-for-resilient-a.pdf
- Size
- 494,002 bytes
- SHA-256
- 2e6c36e8f44f6dce4965df78ffdfc594055aac3c4b59e7c37d3a4511cf39af0b
- Our copy
- sharma-2023-understanding-the-impact-of-covid-19-on-msmes-in-india-lessons-for-resilient-a.pdf
- Original
- jsbs.scholasticahq.com