COVID-19 Lockdown Restrictions and Small Business Survival Strategy: Government Supporting Schemes

Minyahil Assefa

Business Perspectives and Research, 2023, vol. 11, issue 2, 227-245

Abstract: From antiquity to the present day, the contribution of small businesses to the economic development of a country is overwhelming. Nowadays, COVID-19 lockdown restrictions have exerted an outrageous impact on small businesses survival. In developing countries where government-supporting capacity is low, the severity is substantial. The present study predicts the impact of COVID-19 lockdown restriction and government supporting schemes on small business survival. To meet this purpose, the study primarily used PLS-SEM and binary logit models. The results confirmed that over 44% of small businesses would fail in the first month of lockdown restriction. Moreover, only 6% have cash reserve to survive twelve months. In this regard, the present study suggested that the government should have to abstain from total lockdown measures, without government-supporting schemes. As such, the study has examined the relative importance of COVID-19 based special loan, suspension of payments, withdrawal of restricted funds, and exemption of tax and penalty payments. Among these supporting schemes, COVID-19 based special loan is the most important government-supporting scheme followed by the suspension of interest and principal payments. However, the exemption of tax payments and withdrawal of restricted funds were not significant.

Keywords: COVID-19; small business; government supporting; survival strategy; PLS-SEM; Ethiopia (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:busper:v:11:y:2023:i:2:p:227-245

DOI: 10.1177/22785337211045182

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