Entrepreneurs’ Responses to an Economic Crisis: Evidence from a Transitional Economy

Abstract

This study analyses small-firm responses to an economic crisis, based on an empirical investigation in the post-conflict economy of Kosovo. Although the recent financial crisis affected all economies, we can expect differences in its effects across economies depending on their level of economic development, relative exposure to the crisis, as well as differences in entrepreneurial responses to adapt to the crisis. Kosovo makes a unique case to investigate the impact of the crisis on firm adaptive strategies to overcome or cope with the crisis. Drawing on data from in-depth, multiple case studies show that small firms during the crisis have successfully chosen to diversify and expand into new areas of business in order to compensate for low demand. By contrast, cost reduction was not a successful strategic response. The study demonstrates that although crisis affects many small firms, they show underlying resilience and a high level of adaptability and flexibility.

Citation

Domi, A. and Krasniqi, B. (2019), "Entrepreneurs’ Responses to an Economic Crisis: Evidence from a Transitional Economy", Dana, L.-P. and Ratten, V. (Ed.) Societal Entrepreneurship and Competitiveness, Emerald Publishing Limited, Leeds, pp. 185-202. https://doi.org/10.1108/978-1-83867-471-720191013