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Impact of Global Crisis on Small and Medium Enterprises

Author

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  • Sahana Roy Chowdhury

    (Indian Council For Research On International Economic Relations; Core-6A, 4th Floor, India Habitat Centre, Lodi Road, New Delhi 110 003, India. E-mail: sahana.isi@gmail.com)

Abstract

The impact of financial crisis has not been uniform across the globe. Apart from the epicentre of the crisis, those with higher dependency on external markets both for trade and finance had more immediate and larger impact of the global contagion. In contrast, the small businesses with lower diversification of product base and little option for downsizing had a relatively homogeneous impact across the world economies irrespective of trade dependency of the economy. This is because of strong backward linkages or an extensive participation of small and medium industries in the upstream supply chain, producing intermediates for both the exporting as well as non-exporting large industries. On the other hand, credit crunch faced by the small and medium enterprises (SMEs), deemed less credible but relatively more credit dependent than large industries, invigorated the impact of the crisis. Besides, some factors very specific to SMEs made them more vulnerable to the crisis.

Suggested Citation

  • Sahana Roy Chowdhury, 2011. "Impact of Global Crisis on Small and Medium Enterprises," Global Business Review, International Management Institute, vol. 12(3), pages 377-399, October.
    • Handle: RePEc:sae:globus:v:12:y:2011:i:3:p:377-399
    DOI: 10.1177/097215091101200303
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    References listed on IDEAS

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    1. Dean Yang, 2008. "International Migration, Remittances and Household Investment: Evidence from Philippine Migrants’ Exchange Rate Shocks," Economic Journal, Royal Economic Society, vol. 118(528), pages 591-630, April.
    2. World Bank, 2010. "Global Economic Prospects, June 2010," World Bank Publications - Books, The World Bank Group, number 12104, December.
    3. Khor , Niny & Sebastian, Iva, 2009. "Exports and the Global Crisis: Still Alive, though Not Quite Kicking Yet," ADB Economics Working Paper Series 190, Asian Development Bank.
    4. World Bank, 2010. "Global Economic Prospects, January 2010," World Bank Publications - Books, The World Bank Group, number 2415, December.
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    Cited by:

    1. Samrat Roy & Chanchal Chatterjee, 2013. "Dynamics of Trade Potentials in ‘Emerging Asia’ in the Post Financial Crisis Era," Global Business Review, International Management Institute, vol. 14(4), pages 639-650, December.
    2. Horvath, Akos & Lang, Peter, 2021. "Do loan subsidies boost the real activity of small firms?," Journal of Banking & Finance, Elsevier, vol. 122(C).
    3. Deepak Tandon & Yogieta S. Mehra, 2017. "Impact of Ownership and Size on Operational Risk Management Practices: A Study of Banks in India," Global Business Review, International Management Institute, vol. 18(3), pages 795-810, June.
    4. Askoldas Podviezko & Ralph Kurschus & Giedre Lapinskiene, 2019. "Eliciting Weights of Significance of Criteria for a Monitoring Model of Performance of SMEs for Successful Insolvency Administrator’s Intervention," Sustainability, MDPI, vol. 11(20), pages 1-16, October.
    5. P.K. Mishra, 2014. "Gold Price and Capital Market Movement in India: The Toda–Yamamoto Approach," Global Business Review, International Management Institute, vol. 15(1), pages 37-45, March.

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