IDEAS home Printed from https://ideas.repec.org/a/ris/sphecs/0411.html

Impact Of Economic Crises On Firms: A Literature Review

Author

Listed:
  • ISABIRYE Joel

    (Kampala International University)

Abstract

This paper examines literature that analyzes how economic crises affect firms. Eighty-five studies were examined with the overall aim of finding out the impact of crises on firms. Studies published between 1805 and 2018 were sampled purposively through digital database searches, to establish the most recent literature on the impact of crises on firms. Consequently, the majority of the work assessed focuses on the global economic crisis of 2007 and its effect on firms in a different country and regional contexts. The literature demonstrates that economic crises affect firms negatively and positively with a tendency for crises to affect firms more negatively. Negative impacts include a decline in demand, fall in profitability, debt problems, operational challenges, bankruptcy, loss of goodwill or public image, uncertainty, and scale down of operations. Positive impacts comprise stimulation of efficiency, and improved performance for strategic firms The review further establishes that the impact of crises on firms varies from firm to firm, which requires that to examine the impacts of economic crises on firms requires that the firms are studied on a case-to-case basis.

Suggested Citation

  • ISABIRYE Joel, 2021. "Impact Of Economic Crises On Firms: A Literature Review," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 21(3), pages 225-250.
    • Handle: RePEc:ris:sphecs:0411
    as

    Download full text from publisher

    File URL: http://anale.spiruharet.ro/index.php/economics/article/view/1084/pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Marko Peric & Vanja Vitezic, 2016. "Impact of global economic crisis on firm growth," Small Business Economics, Springer, vol. 46(1), pages 1-12, January.
    2. Tsoy Lyubov & Almas Heshmati, 2023. "Impact Of Financial Crises On The Dynamics Of Capital Structure: Evidence From Korean Listed Companies," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(03), pages 867-898, June.
    3. Andrea Buratti & Francesca Maria Cesaroni & Annalisa Sentuti, 2018. "Does Gender Matter in Strategies Adopted to Face the Economic Crisis? A Comparison Between Men and Women Entrepreneurs," Chapters, in: Ladislav Mura (ed.), Entrepreneurship - Development Tendencies and Empirical Approach, IntechOpen.
    4. Truong Hong Trinh & Nguyen Thao Phuong, 2016. "Effects of Financial Crisis on Capital Structure of Listed Firms in Vietnam," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 7(1), pages 66-74, January.
    5. Stella Kaendera & S. V. S. Dixit & Nabil Ben Ltaifa, 2009. "Impact of the Global Financial Crisis on Exchange Rates and Policies in Sub-Saharan Africa," IMF Departmental Papers / Policy Papers 2009/006, International Monetary Fund.
    6. Iffet Gorkey Kesimli & Suleyman Gokhan Gunay, 2011. "The impact of the global economic crisis on working capital of real sector in Turkey," Business and Economic Horizons (BEH), Prague Development Center, vol. 4(1), pages 52-69, January.
    7. Agustinus Prasetyantoko, 2006. "Financing Constraint and Firm Investment Following a Financial Crisis in Indonesia," Post-Print halshs-00133964, HAL.
    8. Kesimli, Iffet & Gunay, Suleyman, 2011. "The impact of the global economic crisis on working capital of real sector in Turkey," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 4(01), pages 1-18, January.
    9. Maggie Chen & Laura Alfaro, 2010. "Surviving the Global Financial Crisis: Foreign Direct Investment and Establishment Performance," Working Papers 2010-17, The George Washington University, Institute for International Economic Policy.
    10. Nicholas Tsounis & Aspasia Vlachvei (ed.), 2018. "Advances in Time Series Data Methods in Applied Economic Research," Springer Proceedings in Business and Economics, Springer, number 978-3-030-02194-8, June.
    11. KONTOGEORGOS, Achilleas & PENDARAKI, Konstantina & CHATZITHEODORIDIS, Fotios, 2017. "Economic Crisis And Firms’ Performance: Empirical Evidence For The Greek Cheese Industry," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 26(1), pages 73-82.
    12. Dietmar Sternad, 2012. "Adaptive Strategies in Response to the Economic Crisis: A Cross-Cultural Study in Austria and Slovenia," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 10(3 (Fall)), pages 257-282.
    13. Agustinus Prasetyantoko, 2007. "Financing Constraint and Firm-Level Investment Following a Financial Crisis in Indonesia," Working Papers 0714, Groupe d'Analyse et de Théorie Economique Lyon St-Etienne (GATE Lyon St-Etienne), Université de Lyon.
    14. Byrne, Joseph P & Spaliara, Marina-Eliza & Serafeim, Tsoukas, 2015. "Firm survival, uncertainty and financial frictions: Is there a financial uncertainty accelerator?," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-68, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Tiia Vissak, 2013. "Impact of the Global Crisis on the Internationalization of Estonian Firms: A Case Study," Palgrave Macmillan Books, in: Marin A. Marinov & Svetla T. Marinova (ed.), Emerging Economies and Firms in the Global Crisis, chapter 12, pages 292-313, Palgrave Macmillan.
    16. repec:aer:wpaper:332 is not listed on IDEAS
    17. Grifell-Tatjé,Emili & Lovell,C. A. Knox, 2015. "Productivity Accounting," Cambridge Books, Cambridge University Press, number 9780521709873.
    18. Catherine L. Mann, 2011. "Start-up Firms in the Financial Crisis," Rosenberg Global Financial Briefs 3, Brandeis University, Rosenberg Institute of Global Finance, International Businesss School.
    19. repec:wbk:wbpubs:4354 is not listed on IDEAS
    20. Joseph P. Byrne & Marina-Eliza Spaliara & Serafeim Tsoukas, 2016. "Firm Survival, Uncertainty, And Financial Frictions: Is There A Financial Uncertainty Accelerator?," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 375-390, January.
    21. repec:wbk:wbpubs:4356 is not listed on IDEAS
    22. Ourania Notta & Aspasia Vlachvei & Evita Grigoriou, 2018. "Effects of the Greek Financial Crisis to the Food Manufacturing Firms," Springer Proceedings in Business and Economics, in: Nicholas Tsounis & Aspasia Vlachvei (ed.), Advances in Time Series Data Methods in Applied Economic Research, chapter 0, pages 547-560, Springer.
    23. Kolb, Robert W., 2011. "The Financial Crisis of Our Time," OUP Catalogue, Oxford University Press, number 9780199730551.
    24. Marko Peric & Vanja Vitezic, 2016. "Impact of global economic crisis on firm growth," Small Business Economics, Springer, vol. 46(1), pages 1-12, January.
    25. Masayuki MORIKAWA, 2015. "Uncertainty over Business Conditions and Investment (Japanese)," Discussion Papers (Japanese) 15040, Research Institute of Economy, Trade and Industry (RIETI).
    26. Eleni Papaoikonomou & Pere Segarra & Xiaoni Li, 2012. "Entrepreneurship in the Context of Crisis: Identifying Barriers and Proposing Strategies," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(1), pages 111-119, February.
    27. Mara Faccio & Rajdeep Sengupta, 2011. "Corporate response to distress: evidence from the Asian financial crisis," Review, Federal Reserve Bank of St. Louis, vol. 93(Mar), pages 127-154.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richa Chaturvedi & Ashok Karri, 2022. "Entrepreneurship in the Times of Pandemic: Barriers and Strategies," FIIB Business Review, , vol. 11(1), pages 52-66, March.
    2. Sara C. Santos Cruz & Aurora A. C. Teixeira, 2021. "Spatial analysis of new firm formation in creative industries before and during the world economic crisis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(2), pages 385-413, October.
    3. Stjepan Srhoj & Vanja Vitezić & Janette Walde, 2022. "Do small public grants boost tourism firms’ performance?," Tourism Economics, , vol. 28(6), pages 1435-1452, September.
    4. Andrew Chan & Francis Cheng & Shuk-Ling Cheng, 2023. "Post-Crisis Sustainable Performance of Manufacturing SMEs: The Roles of Positive Orientation, Financial Slack, and External Networks," Sustainability, MDPI, vol. 15(17), pages 1-18, August.
    5. Michael Berlemann & Vera Jahn & Robert Lehmann, 2022. "Is the German Mittelstand more resistant to crises?," Small Business Economics, Springer, vol. 59(3), pages 1169-1195, October.
    6. Stjepan Srhoj & Michael Lapinski & Janette Walde, 2019. "Size matters? Impact evaluation of business development grants on SME performance," Working Papers 2019-14, Faculty of Economics and Statistics, Universität Innsbruck.
    7. Sami Ben Jabeur & Rabi Belhaj Hassine & Salma Mefteh‐Wali, 2021. "Firm financial performance during the financial crisis: A French case study," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 2800-2812, April.
    8. Iman Cheratian & Saleh Goltabar & Mohammad Reza Farzanegan, 2023. "Firms persistence under sanctions: Micro‐level evidence from Iran," The World Economy, Wiley Blackwell, vol. 46(8), pages 2408-2431, August.
    9. Liu, Yu & Peng, Mike W. & Wei, Zuobao & Xu, Jian & Xu, Lixin Colin, 2025. "Surviving and recovering in times of crisis: A resource dependence view of firm ownership," Journal of Business Research, Elsevier, vol. 199(C).
    10. Iman Cheratian & Saleh Goltabar & Mohammad Reza Farzanegan, 2022. "Survival Strategies Under Sanctions: Firm-Level Evidence from Iran," Working Papers 1569, Economic Research Forum, revised 20 Aug 2022.
    11. Yannis Caloghirou & Ioannis Giotopoulos & Alexandra Kontolaimou & Aggelos Tsakanikas, 2022. "Inside the black box of high-growth firms in a crisis-hit economy: corporate strategy, employee human capital and R&D capabilities," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1319-1345, September.
    12. Jun Sung Kim & Taehoon Kim, 2022. "Geographic spread of COVID‐19 and local economies: Heterogeneous effects by establishment size and industry," Journal of Regional Science, Wiley Blackwell, vol. 62(3), pages 696-731, June.
    13. Christos Axioglou & Nicos Christodoulakis, 2021. "Which firms survive in a crisis? Investigating Gibrat’s Law in Greece 2001–2014," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(2), pages 159-217, June.
    14. Emine Ebru AKSOY & Erginbay U URLU, 2015. "How did the 2007-2008 Financial Crisis Influence Turkish Firms," Journal of Economics and Political Economy, EconSciences Journals, vol. 2(4), pages 494-506, December.
    15. Alex Coad & Stjepan Srhoj, 2020. "Catching Gazelles with a Lasso: Big data techniques for the prediction of high-growth firms," Small Business Economics, Springer, vol. 55(3), pages 541-565, October.
    16. Emine Ebru AKSOY & Erginbay UÐURLU, 2015. "How did the 2007-2008 Financial Crisis Influence Turkish Firms," Journal of Economics and Political Economy, KSP Journals, vol. 2(4), pages 494-506, December.
    17. Andrea Fracasso & Kun Jiang, 2022. "The performance of private companies in China before and during the global financial crisis: firms’ characteristics and entrepreneurs’ attributes," Economic Change and Restructuring, Springer, vol. 55(2), pages 803-836, May.
    18. Lucio Masserini & Matilde Bini & Alessandro Zeli, 2021. "A Longitudinal Analysis of Riskiness Indicators After the 2008 and 2011 Economic Crises: The Case of Italian Manufacturing," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 156(2), pages 499-513, August.
    19. Srhoj, Stjepan & Kovač, Dejan & Shapiro, Jacob N. & Filer, Randall K., 2023. "The impact of delay: Evidence from formal out-of-court restructuring," Journal of Corporate Finance, Elsevier, vol. 78(C).
    20. Osiyevskyy, Oleksiy & Shirokova, Galina & Ritala, Paavo, 2020. "Exploration and exploitation in crisis environment: Implications for level and variability of firm performance," Journal of Business Research, Elsevier, vol. 114(C), pages 227-239.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:sphecs:0411. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Constantin Mecu The email address of this maintainer does not seem to be valid anymore. Please ask Constantin Mecu to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/ffuspro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.