Psychological resilience and business survival chances: A study of small firms in the USA during COVID-19

Journal of Business Research

In the present era of climate change and global environmental threats, there is a growing emphasis on circular economy. Circular economy is based on reducing consumption, reusing resources and recycling waste. Small firms make huge contributions to the circular economy. However, the survival of small firms remains a major concern. According to an estimation only 22% of small firms survive only for one year, and more than half of small firms survive only for five years. Further, the COVID-19 pandemic added more challenges for survival of these firms. Firm owners play a critical role in all business-related decisions including survival chances. Based on the data of 657 small firm owners during COVID-19 (May-June 2020), the authors of this study found that small firm owners having higher psychological resilience had higher business survival chances and this linkage existed through decrease in depression. Further, in conditions of high financial fragility, firm owners having high psychological resilience experienced lesser depression, resulting in higher business survival chances. The implications of the study for policymakers were discussed.