Masters of disasters? Challenges and opportunities for SMEs in times of crisis

Small and medium-sized enterprises (SMEs) are the backbone of every economy. So, when an external crisis jeopardizes markets, such as the recent COVID-19 outbreak, SMEs are hit with great force. Their so-called liability of smallness, a lack of resources that would shield them from outside shocks, worsens the situation. This manuscript conducts a literature study on 69 manuscripts that studied SMEs in previous crises and proposes ways to overcome economic downturns in the areas of finance, strategy and the institutional environment. The paper finds a “strategy/funding chicken-and-egg-problem” and proposes an effectual world view when dealing with situations of great uncertainty.