The role of SMEs’ resilience capabilities in response to COVID-19 era: Evidence from Kazakhstan and Mongolia

Abstract

In many low and middle-income countries, small and medium-sized enterprises (SMEs) play an important role in providing employment, increasing the level of gross domestic product and export share, and in alleviating poverty and inequality. Therefore, governments and international donor organizations take action to diversify and provide access to sustainable financial means for SMEs and support them in many ways. The sudden outbreak of COVID-19 has impacted all-sized enterprises including micro, SMEs, large enterprises, and MNEs negatively, especially in the least developed and developing countries. This is because micro-sized and SMEs were more vulnerable to the pandemic due to their limited financial resources and low resilience capability. Resilience capabilities and innovative characteristics are crucial for SMEs to survive and to respond quickly to sudden phenomena unpredictable in advance. Big enterprises with financial and other resilience capabilities typically address and solve any issue in a timely manner. Even if the theoretical framework of the enterprises’ resilience is well-grounded and studied extensively, most literature in the field mainly focuses on large entities, and only few have explored SMEs. Thus, this study can significantly contribute to practical and theoretical knowledge, especially for SMEs in landlocked countries such as Mongolia and Kazakhstan. This research helped to develop recommendations that are helpful for SMEs to survive during potential threats such as COVID-19, natural disasters, extreme weather conditions (EWCs), and economic recessions.

The Role of Entrepreneurship in Economic Resilience

“…Small and medium-sized enterprises (SMEs) are recognized globally for their significant role in enhancing economic resilience through employment generation. SMEs are crucial in providing employment opportunities, contributing to the gross domestic product (GDP), promoting entrepreneurship, and reducing poverty and inequality (Altnaa & Neszmélyi, 2023). They are considered engines of economic and social development, fostering economic growth, wealth creation, and industrial development (Devos et al, 2012;Kumar, 2015).…”