SMEs’ responses to the financial and economic crisis and policy implications: an analysis of agricultural and furniture sectors in Catalonia, Spain

In the context of the deepest financial and economic recession since the 1930s, the success of small and medium-sized enterprises (SMEs) becomes crucial to restore economic stability. Especially, the Catalan and Spanish economies, which heavily depend on SMEs, need to understand how these firms respond to the ongoing crisis. For this purpose, the previous literature on firms’ responses during crisis was reviewed and attention was placed on the classic Hofer framework which inspired the analysis of the data. The paper focuses on the furniture and agricultural sectors due to the significant impact caused by the current crisis. Data were sourced from the SABI database which provides financial and general information on firms in distinct sectors and sizes in Spain and Portugal. The final sample covers the furniture and agricultural sectors during 2004–2008 in the Catalonian region of Spain, with data in the form of book values and key variables generated so as to detect firms’ responses to the current recession. The evolution of those key variables also reflects the SMEs’ policies in both sectors within the timeframe analysed. The vulnerability of both sectors to the ongoing crisis is confirmed and certain trends in terms of firms’ cost, asset and return are identified. Hence, corresponding implications for policy-makers are further proposed.