Entrepreneurship and SMEs under COVID-19 crisis: A literature review

Objective: The article aims to summarize the impact of the COVID-19 crisis on SMEs, considering both its positive and negative effects. Also, the study seeks to summarize the response approaches usable for SMEs to face a crisis. Research Design & Methods: This article uses a critical literature review to summarize the international literature developed on the COVID-19 crisis topic. It considers scientific papers published from 2017 to February 2022 with a focus on specific keywords, English language, from the open access sources on (i) Emerald, (ii) JSTOR, (iii) ScienceDirect, and (iv) Springer, (v) IER, and (vi) EBER. Findings: The paper sheds light on how the uncertainty caused by the COVID-19 crisis can impact SMEs. The paper tries to summarize the literature on how SMEs can reverse the uncertainty caused by a crisis and benefit from it. Also, the paper reviews the fact that some SMEs cannot cope quickly enough with the changes in the environment and forcibly shut down their business. The most damaging impact of the COVID-19 crisis is also reviewed in this paper which is the business closure due to lack of resources or disconnection of SMEs from their partners. Implications & Recommendations: This study provides an overview of the positive and negative effects that the COVID-19 crisis had on SMEs. Three approaches were reviewed, uncertainty, resilience, and opportunity, which the decision-makers can use to plan their strategies more effectively and face impending crises more efficiently. This paper also introduces gaps such as the lack of evidence of how COVID-19 affects the entrepreneurship phenomena, which is worth being studied. Contribution & Value Added: This study summarizes the three approaches mentioned in various research papers that SMEs can take during crises and presents gaps worth researching. While many other studies study entrepreneurship at macro levels, the approach in this study is unique as it considers a particular piece of entrepreneurship area and looks at it in terms of small and medium-sized enterprises, describes why COVID-19 is a crisis to the business environment and contributes to the literature to explain how entrepreneurship and SMEs are influenced by COVID-19 situation. I summarized some of the issues SMEs face during a crisis and mentioned the approaches to be taken by business owners during such times using articles conducted in the last five years.