The effects of the COVID-19 crisis on startups&apos; performance: the role of resilience

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Abstract

Purpose

This paper aims to evaluate the impacts of the COVID-19 crisis on startups performance and the moderating effects played by several resilience-related startup characteristics during times of crisis.

Design/methodology/approach

To achieve this, 94 Brazil-based startups were surveyed, and multivariate data techniques (PLS-SEM) were applied.

Findings

The results show that despite the startups performance having been affected by the pandemic crisis, the response measures, when influenced by the resilience characteristics of these companies, moderated this effect. Furthermore, our findings suggest the future challenges to be faced by these organisations in the post-pandemic period.

Research limitations/implications

Proposing a framework, our survey research contributes to the dynamic capabilities theory by showing that startups resilience is linked to the micro-foundations of sensing (e.g. innovation systems, resilience culture, pivoting practices, innovativeness products), seizing (e.g. leadership/focused skills, people development and selection, agility, clear vision of business process) and reconfiguring capabilities.

Practical implications

Not only for theory, but this paper also contributes insights and guidelines for business practice in the face of challenges arising from times of crisis. By demonstrating the positive effect of early response measures based on resilience, our findings provide genuine managerial input that can help managers, funders and decision-makers in these companies operations against turbulent crises early on, thereby supporting the traction phase and sustaining their performance.

Originality/value

Previous research has examined the effects of the COVID-19 crisis in several sectors and perspectives. However, this study is the first to empirically test and clarify how the resilience and singularities of these new business models based on innovation could react to the changes caused by the pandemic.

Related collections

Most cited references 91

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Common method biases in behavioral research: A critical review of the literature and recommended remedies.

Philip M Podsakoff, Scott MacKenzie, Jeong-Yeon Lee … (2003)

Interest in the problem of method biases has a long history in the behavioral sciences. Despite this, a comprehensive summary of the potential sources of method biases and how to control for them does not exist. Therefore, the purpose of this article is to examine the extent to which method biases influence behavioral research results, identify potential sources of method biases, discuss the cognitive processes through which method biases influence responses to measures, evaluate the many different procedural and statistical techniques that can be used to control method biases, and provide recommendations for how to select appropriate procedural and statistical remedies for different types of research settings.