SMEs’ Innovativeness and Technology Adoption as Downsizing Strategies during COVID-19: The Moderating Role of Financial Sustainability in the Tourism Industry Using Structural Equation Modelling

Fanar Shwedeh, Ahmad Aburayya (), Raghad Alfaisal, Ayotunde Adetola Adelaja, Gbemisola Ogbolu, Abid Aldhuhoori and Said Salloum
Additional contact information
Fanar Shwedeh: School of Business Management, City University Ajman, Ajman P.O. Box 18484, United Arab Emirates
Ahmad Aburayya: Business Administration College, MBA Department, City University Ajman, Ajman P.O. Box 18484, United Arab Emirates
Raghad Alfaisal: Faculty of Art, Computing and Creative Industries, Universiti Pendidikan Sultan Idris, Tanjong Malim 35900, Malaysia
Ayotunde Adetola Adelaja: Faculty of Social Science and Management, Mewar International University, Km21, Kuchikau I, Abuja-Keffi Rd, New Karu 961101, Nasarawa State, Nigeria
Gbemisola Ogbolu: International Business School, Teesside University, Middlesbrough TS1 3BX, UK
Abid Aldhuhoori: Faculty of Business and Management, The British University in Dubai, Dubai P.O. Box 345015, United Arab Emirates
Said Salloum: School of Science, Engineering, and Environment, University of Salford, Salford M5 4WT, UK

Sustainability, 2022, vol. 14, issue 23, 1-18

Abstract: This study aims to identify why firms, specifically SMEs in the hospitality and tourism industry, downsized during the recent global economic distress caused by COVID-19. This study applied a quantitative methodology by distributing online questionnaires to SME owners and managers who operate in the tourism industry of the UAE. We analysed the collected data using structural equation modelling. A total of 320 questionnaires were analysed using the PLS-SEM analytic tool. Our findings revealed that the investigated constructs, namely financial sustainability, SMEs’ innovativeness, and technology adoption predict the implementation of downsizing strategies during economic distress. However, financial sustainability failed to expedite SMEs’ innovativeness and technology adoption during this period. Therefore, the findings of this study show the impacts of financial strength, technology adoption, and innovativeness on implementing downsizing strategies, and provide suggested recommendations in light of the observed results.

Keywords: financial sustainability; SMEs’ innovativeness; technology adoption; economic distress; COVID-19 (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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