Innovation-based diversification strategies and the survival of emerging economy village-owned enterprises (VOEs) in the COVID-19 recession

Abstract

Purpose The global recession caused by the COVID-19 pandemic has led to the closure of thousands of village-owned enterprises (VOEs), which are community-managed enterprises that operate in the hostile rural areas in emerging economies. Thus, considering that a Schumpeterian view of economic downturn sees recessions as times where old products/services decline while new products/services emerge, this paper aims to explore the specific innovation-based diversification strategies that matter for the survival of emerging economy VOEs in recession periods to develop new theoretical insights. Design/methodology/approach The study is based on multiple-case studies of 13 leading VOEs operating in the rural areas of Java Island in Indonesia, an emerging economy. The data was analysed using within-case and cross-case analyses. Findings Overall, a number of major novel findings have emerged from the analysis, based on which the authors developed several new propositions. First, from the perspectives of both new product and new service diversification, “unrelated diversification” is the primary resilience strategy that seems to be associated with the survival of VOEs in the COVID-19 recession, over and above “related diversification”. Second, from an industrial sector diversification perspective, the most dominant resilient strategy for surviving the recession is “unrelated diversification into tertiary sectors (service sector)”, over and above diversification into the primary sector (agriculture, fisheries and mining) and secondary sector (manufacturing and construction). Originality/value The authors contribute to the literature on entrepreneurship in emerging economies by identifying the resilience diversification strategies that matter for the survival of VOEs in recession.

Changes in SME Business Due to COVID-19—Survey in Slovakia and the Czech Republic

“…According to the results of the presented primary research, the measures taken by Slovak and Czech SMEs to cope with the crisis were about the same proportion of positive and creative measures (about 50%), i.e., adapting the way of doing business and offering products to market changes and using financial savings for business operations and investments. Chomicki and Mierzejewska (2020); Thukral (2021) and Yaya et al (2022) in their studies also pointed to the need to apply strategies oriented towards innovation, agility and creativity. Different results in the presented primary surveys were found in the use of restrictive measures towards employees, where almost twice as many Slovak as Czech entrepreneurs reduced the costs of employees either by dismissing them or by reducing working hours and wages.…”

“…According to Zhang et al (2021), top management should evaluate both internal and external factors that affect the company's performance, understand their results and seize the opportunities to protect the company. The importance of strategic flexibility, innovation-oriented strategies, implementing agile behaviour and dynamic capabilities and applying creativity to adapt to new conditions has been highlighted as a matter of survival in emerging economies (Chomicki and Mierzejewska 2020;Thukral 2021;Zutshi et al 2021;Yaya et al 2022;Chen et al 2023). According to Zahoor et al (2022), agile adaptation and exploitation of new opportunities were the main means of coping with the disruptions caused by the COVID-19 pandemic in Finnish SMEs.…”

Empowering village-owned enterprises: Examining leadership, innovation and government support

“…According to Mui, et al [21] this action fosters a conducive atmosphere for developing innovative ideas. There is a lack of research on this link particularly in the unique context of VOEs despite recognizing the impact of leadership on the ability to innovate in more significant organizations [22]. This study aims to investigate the complex dynamics involved in analyzing the impact of different leadership styles on enhancing innovation capacities inside VOE organizations.…”

Optimal Machine Learning- and Deep Learning- driven algorithms for predicting the future value of investments: A systematic review and meta-analysis

“…Thus, this report aims to analyse and distil any actionable insights from the relevant literature with focus in the Asia-Paci c (APAC) region, in particular China and the town 'Shenzhen', where several asset management companies are headquartered. In fact, the volatility of the value of the funds they manage, along with the increasingly diversi ed portfolios of competitors in Shenzhen in particular, e.g., China Southern Asset Management (Sun, 2018), and China more broadly, e.g., Guotai Asset Management (Qureshi et al, 2019), particularly during the COVID-19 pandemic (Song & Zhou, 2020;Delios et al, 2021), has led the organisation to modernise their operations and consider investing in leveraging AI-driven technologies to aid investment fund management and achieve a higher level of organisational resilience (Yang et al, 2021), especially during the current times of national and global recession (Yaya et al, 2022;Ozili & Arun, 2023).…”