Crisis mitigating measures of small business during the COVID-19 pandemic crisis: the case of Indonesia

Abstract

This article investigates the impact of the 2020 COVID-19 pandemic on micro and small enterprises (MSEs) and explores crisis mitigation measures (CMM) taken by affected MSEs. It is based on secondary data analysis from the 2020 national survey on MSEs in the manufacturing industry and primary data analysis from a survey of 137 MSEs in several cities and sectors in Indonesia during the period May to September 2020. Results reveal that in the first year of the pandemic crisis the production growth of MSEs experienced a deep contraction. Many have had to temporarily halt production or close completely. The author also found that moving to other industries so that they could stay in business was a popular form of CMM carried out by many affected MSEs. The drawback of this study is the limited sample. The main issue is related to survival analysis. Limitation of the sample sizes precludes from in-depth survival analyses, which may highlight fundamental differences in the development patterns of the MSEs during the crisis. The results add more evidence on the impact of the COVID-19 economic crisis on MSEs and how they have responded to it. This study contributes to the literature on MSEs in times of economic crisis.