Entrepreneurial resilience and firm performance during the COVID-19 crisis -Evidence from Hungary (original) (raw)
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Purpose: The aim of the paper is to identify and discuss many trade-offs which have to be made by public authorities while designing and implementing state aid measures for entrepreneurs affected by the Covid-19 pandemic. Design, Methodology/Approach: Based on the case study-the project "Grant for working capital for micro and small enterprises from the Wielkopolska Region" four interrelated lines of inquiry are pursued concerning: the grant selection process, timelines of support, administrative burden imposed on applicant entrepreneurs and the appropriateness of the amount of aid granted. Specific problems are discussed in a broader perspective of public support programmes design. Findings: Timelines of support and simplicity of the rules of granting aid are imperative in designing the public support delivery for entrepreneurs affected by the Covid-19 pandemic. However, one should not lose sight from other important aspects of allocating limited public funds, as it is usually a matter of striking the right balance by public policymakers between competing objectives in an attempt to ensure effective and fair allocation of limited resources. Practical Implications: State aid that involves granting a selective economic advantage to undertakings imply the question about the allocation method of funds. Given the risk of liquidity shortage for SMEs that makes fast delivery of aid crucial for the aid to achieve its objective, providing public support on the basis 'first-come, first served' principle can be a justifiable rationing device. However, this holds true under certain conditions: all applicants must be in relevantly similar circumstances and have equal prospects to receive a benefit. As these are not fully met in the case under investigation, some recommendations are formulated for future interventions. Originality/Value: Public debate on SME policy responses in times of Covid-19 crisis is often limited to numbers: how many entrepreneurs benefited from the public support and what is the aggregate value of the aid. The uniqueness of the conducted research lies in "looking under the surface" in the quest for ensuring effectiveness of state aid measures in the context of COVID-19.
Crisis costs for European SMEs – How COVID-19 changed the playing field for European SMEs.
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The advent of the COVID-19 pandemic has become the landmark for one of the greatest recessions ever experienced. As such, many Small and Medium Enterprises (SMEs) were exposed to financial and employment-related losses. However, not all industry sectors suffered same negative rates of income or job disruptions and there is still limited evidence on the matter. In addition, the invasion of Ukraine from Russia has become the trigger for a new wave of economic crisis for all business sectors and sizes. Therefore, the objective of this study is to develop a systematic classification of COVID-19 (and international crisis)-related impacts on SMEs. It also includes an identification of “winning” or “losing” adaptation factors shaping crisis management. To achieve its finalities, the study develops an explanatory framework by generating six categories of “pandemic challenge areas” (Containment Measures, Workforce, Finance, Digitalisation, Public Assistance, European Diversity) and a targeted performance analysis for SMEs in 6 industry sectors (Manufacturing, Construction, I&R, Tourism, Agro-Food, Retail) over an EU-12 sample of countries. Based upon research evidence, the study ultimately proposes a list of policy recommendations for recovery and competitiveness of SMEs alongside four pillars (emergency support, regulation & governance, training & skills and innovation, sustainability & cohesion).
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