Public policy responses to COVID-19 and the survival of ethnic minority businesses (EMBs): does entrepreneurial orientation (EO) matter?

Abstract

Purpose

The global economic crisis triggered by the coronavirus disease 2019 (COVID-19) has caused the closure of countless ethnic minority businesses (EMBs) worldwide, partly due to the public policy responses. This paper investigates whether EMBs’ entrepreneurial orientation (EO) mediates the impact of public policy responses to COVID-19 on their survival.

Design/methodology/approach

Utilizing institutional theory, the authors developed a novel conceptual framework that divides policy responses to COVID-19 into aggressive (imposing restrictions on movement, e.g. lockdowns) and less aggressive policy responses (not imposing restrictions on movement, e.g. social distancing). The authors then surveyed intra-regional EMBs, specifically businesses owned by ethnic minorities in the Kano and Katsina provinces of Nigeria, and analysed the data using structural equation modelling and analysis of variance (ANOVA).

Findings

The authors found that intra-regional EMBs in developing countries are very vulnerable to the public policy responses imposed by governments to curb COVID-19. Aggressive policy responses have a more significant negative effect on the survival of intra-regional EMBs than their less aggressive counterparts. Furthermore, the authors found that EO as a crisis response strategy significantly supports intra-regional EMBs in managing their vulnerability to the hostile institutional environment, reduces the adverse effect of public policy responses and stimulates their survival during the COVID-19 pandemic.

Originality/value

This paper contributes to the institutional theory of small and medium-sized enterprises (SMEs)/entrepreneurship and the literature on EMBs by showing the role of EO in mediating the effects of COVID-19 institutional policies on the survival of intra-regional EMBs.

Citation

Kabir, I. and Abubakar, Y.A. (2023), "Public policy responses to COVID-19 and the survival of ethnic minority businesses (EMBs): does entrepreneurial orientation (EO) matter?", International Journal of Entrepreneurial Behavior & Research, Vol. 29 No. 3, pp. 561-586. https://doi.org/10.1108/IJEBR-05-2021-0429