COVID-19 and business failures: The paradoxes of experience, scale, and scope for theory and practice
Open accessAbstract
In light of growing scholarly works on business failure, across the social science domains, it is surprising that past studies have largely overlooked how extreme environmental shocks and 'black swan' events such as those caused by the coronavirus (COVID-19) pandemic and other global crises, can precipitate business failures. Drawing insights from the current literature on business failure and the unfolding event of COVID-19, we highlight the paradoxes posed by novel exogenous shocks (that is, shocks that transcend past experiences) and the implications for SMEs. The pandemic has accelerated the reconfiguration of the relationship between states and markets, increasing the divide between those with political connections and those without, and it may pose new legitimacy challenges for some players even as others seem less concerned by such matters, whilst experiential knowledge resources may be both an advantage and a burden.
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Black swan events such as those caused by COVID-19 can amplify business failures, and firms could utilize big data analytics methods to mitigate external risks and reduce business failures through sound business planning and forecasting.
“Black swan events such as those caused by COVID-19 can also amplify business failures (Amankwah-Amoah, Khan and Wood, 2020), and firms could utilize big data analytics methods to mitigate external risks and reduce business failures through sound business planning and forecasting.”
From COVID‐19 Pandemic in the New Era of Big Data Analytics: Methodological Innovations and Future Research Directions (2021) · cites this paper as Amankwah-Amoah, Khan and Wood, 2020
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- Authors
- Amankwah-Amoah, J., Khan, Z., & Wood, G.
- Affiliations
- University of Aberdeen (GB)
- Western University (CA)
- Venue
- European Management Journal
- Publisher
- Elsevier BV
- Published
- 2021-04
- Volume
- 39
- Issue
- 2
- Pages
- 179-184
- ISSN
- 0263-2373 (ISSN-L)
- PMC
- PMC7474582
- OpenAlex
- W3083244312
- Cited by
- 372
- References
- 0
- Citations by year
- 2026: 17 · 2025: 42 · 2024: 51 · 2023: 84 · 2022: 99 · 2021: 70 · 2020: 9
- FWCI
- 55.70
- Type
- journal article
- Language
- en
- Open access
- green
- www.ncbi.nlm.nih.gov
- Locations
- European Management Journal (publishedVersion)
- PubMed Central (publishedVersion)
- PubMed (publishedVersion)
- Kent Academic Repository (University of Kent) (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Aberdeen University Research Archive (Aberdeen University) (submittedVersion)
- Griffith Research Online (submittedVersion, cc-by-nc-nd)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › COVID-19 Pandemic Impacts
- Social Sciences › Business, Management and Accounting › Accounting › Corporate Insolvency and Governance
- Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Entrepreneurship Studies and Influences
- Keywords
- COVID-19 pandemic, business failure, black swan events, small and medium-sized enterprises, political connections, state-market relations, organizational legitimacy, experiential knowledge, external shocks
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