SMEs intervention in Mexico: A case study
Abstract
Historically, Small and Medium Enterprises (SMEs) in developing countries have always suffered from a lack of support from local governments (Aftab et al., 2021; Bartik et al., 2020; Basuno et al., 2010; Lu et al., 2020). Although they do hold a significant position in their contribution to the overall GDP of the country, they are left to their own devices in finding a solution to their problem. In 2020 the temporary closing of non-essential businesses due to COVID-19 as part of a sanitary contagion method took a toll on many SMEs in Mexico and affected the overall economy. In a state where 94.6% of SMEs are micro-size, 4.46% are small, and 0.46% are medium size businesses (INEGI, 2022) there were a series of programs that were implemented by the regional government as well as a university center focused on economics and business topics. This case study aims to contribute to understanding SMEs’ challenges during a health and economic crisis and provide insights into future policy needs that should include university involvement.Keywords:
SME , COVID-19 , Economic interventions , Business relationships , Financial Accessibility for SMEsReferences
Adam N. & Alarifi G. (2021) Innovation practices for the survival of small and medium enterprises (SMEs) in the COVID-19 times: the role of external support, Journal of Innovation and Entrepreneurship 10(1).
Adomako S., Amankwah-Amoah J., Dankwah G.O., Danso A., & Donbesuur F. (2019) Institutional voids, international learning effort and internationalization of emerging market new ventures Journal of International Management, 25, 4, Article 100666.
Aftab R., Naveed M., & Hanif S. (2021) An analysis of Covid-19 implications for SMEs in Pakistan, Journal of Chinese Economic and Foreign Trade Studies, 14, 1, pp. 74-88
Altman, E.I.; Sabato, G.; Wilson, N. The value of non-financial information in small and medium-sized enterprise risk management. Journal of Credit Risk 2010,6, 1–40
Alves, J.C.; Lok, T.C.; Luo, Y.B.; Hao, W. Crisis Management for Small Business during the COVID-19 Outbreak: Survival, Resilience and Renewal Strategies of Firms in Macau.Res. Sq.2020.
Antwi-Boasiako, J., Abbey, C. O., Ogbey, P., & Ofori, R. A. (2021). Policy responses to fight covid-19; the case of Ghana. Revista De Administração Pública, 55(1), 122–139. https://doi.org/10.1590/0034-761220200507
Ashford, N. A., Hall, R. P., Arango-Quiroga, J., Metaxas, K. A., & Showalter, A. L. (2020). Addressing inequality: The first step beyond covid-19 and towards Sustainability. Sustainability, 12(13), 5404. https://doi.org/10.3390/su12135404
Aspachs, O., Durante, R., Graziano, A., Mestres, J., Reynal-Querol, M., & Montalvo, J. G. (2021). Tracking the impact of covid-19 on economic inequality at High Frequency. PLOS ONE, 16(3). https://doi.org/10.1371/journal.pone.0249121
Ayyagari, M., Beck, T., & Demirguc-Kunt, A. (2007). Small and medium enterprises across the globe.Small BusinessEconomics, 29(4), 415–434.https://doi.org/10.1596/1813-9450-3127.
Ayyagari, M., Demirguc-Kunt, A., & Maksimovic, V. (2011).Small vs. young firms across the world: Contribution to employment, job creation, and growth. Washington, DC:World Bank.https://doi.org/10.1596/1813-9450-5631
Banco de México (2021) Indicadores Básicos de Créditos a las Pequeñas y Medianas Empresas (PyMEs). https://www.banxico.org.mx/publicaciones-y-prensa/rib-creditos-a-pymes/%7BD50011D6-98BB-1D8A-85C6-C635535A04DE%7D.pdf
Bartik, A.W., Bertrand, M., Cullen, Z., Glaeser, E.L., Luca, M. and Stanton, C. (2020),“The impact ofCOVID-19 on small business outcomes and expectations”,Proceedings of the National Academy Of Sciences, Vol. 117 No. 30, pp. 17656-17666.
Basuno, E., Yusdja, Y. and Ilham, N. (2010),“Socio-economic impacts of avian influenza outbreaks on small-scale producers in Indonesia”,Transboundary and Emerging Diseases,57, 1/2, pp. 7-10.
Cole R. & Damm J. (2020) How did the financial crisis affect small-business lending in the United states? Journal of Financial Research, 43, 4, pp. 767-820 https://doi.org/10.1111/jfir.12225
Chrisman, J. J., & McMullan, W. E. (2004). Outsider assistance as a knowledge resource for new venture survival.Journal of small business management, 42(3), 229–244
Danielli, S., Patria, R., Donnelly, P., Ashrafian, H., & Darzi, A. (2020). Economic interventions to ameliorate the impact of covid-19 on the economy and health: An international comparison. Journal of Public Health, 43(1), 42–46.
https://doi.org/10.1093/pubmed/fdaa104
Fitriasari, F. (2020). How do Small and Medium-sized Enterprises (SME) survive the COVID-19 outbreak? Journal Inovasi Ekonomi, 5(3). https://doi.org/10.22219/jiko.v5i3.11838
Grondys K, Slusarczyk O, Hussain H, Androniceanu A (2021) Risk assessment of the sme sector operations during the covid-19 pandemic International Journal of Environmental Research and Public Health, 18(8), 4183; https://doi.org/10.3390/ijerph18084183
IMF, 2020. “Policy Responses to covid19.” IMF, https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19.
INEGI,2019. “Publicaciones y Mapas.” Instituto Nacional De Estadística y Geografía (INEGI), https://www.inegi.org.mx/app/biblioteca/ficha.html?upc=702825198657.
Instituto Nacional de Estadística y Geografía (2022). “Directorio Estadístico Nacional De Unidades Económicas. DENUE.” Instituto Nacional De Estadística y Geografía. INEGI, Instituto Nacional De Estadística y Geografía. INEGI, https://www.inegi.org.mx/app/mapa/denue/default.aspx.
Jimenez G., Ongena S., Peydro J., & Saurina J. (2012) Credit supply and monetary policy: Identifying the bank-balance sheet channel with loan applications, American economic review, 102, 2121–2165.
Kenney, M., & Mowery, D. C. (2014). Public Universities and Regional Growth: Insights from the University of California. Amsterdam University Press.
Lehmann, E., & Neuberger, D. (2001). Do lending relationships matter? Evidence from bank survey data in Germany.Journal of Economic Behavior & Organization, 45(4),339–359. https://doi.org/10.1016/S0167-2681(01)00151-2.
Lu, Y., Wu, J., Peng, J. and Lu, L. (2020) The perceived impact of the covid-19 epidemic: evidence from a sample of 4807 SMEs in Sichuan province, China. Environmental Hazards, pp. 1-18
Markovic S., Koporcic N., Arslanagic-Kalajdzic M., Kadic-Maglajlic S., Bagherzadeh M., & Islam N. (2021)Business-to-business open innovation: COVID-19 lessons for small and medium-sized enterprises from emerging markets, Technological Forecasting and Social Change, 170, Article 120883
Mesquita L.F. & Lazzarini S.G.(2008) Horizontal and vertical relationships in developing economies: Implications for SMEs’ access to global markets, Academy of Management Journal, 51, 2 pp. 359-380
Narjoko, D., & Hill, H. (2007). Winners and losers during a deep economic crisis: Firm-level evidence from Indonesian manufacturing.Asian Economic Journal, 21(4), 343–368.https://doi.org/10.1111/j.1467-8381.2007.00261.x
OECD (2021), "An in-depth analysis of one year of SME and entrepreneurship policy responses to COVID-19: Lessons learned for the path to recovery", OECD SME and Entrepreneurship Papers, No. 25, OECD Publishing, Paris, https://doi.org/10.1787/6407deee-en.
Oyewale, A., Adebayo, O., & Kehinde, O. (2020). African Economic Conference. In Estimating the Impact of COVID-19 on Small and Medium Scale Enterprise: Evidence from Nigeria (pp. 1–19). Virtually, Online; African Economic Conference.
Paunovic B., & Anicic, Z. (2021) Impact of the Covid-19 crisis on SMEs and possible innovation response, Ekonomika Preduzeca, 69, 3-4: 169-184 DOI:10.5937/EKOPRE2103169P
Popov A. & Udell G. (2012) Cross-border banking, credit access, and the ̄nancial crisis, Journal of International Economics, 87, 147–161.
Shanka M.S. & Buvik A. (2019) When does relational exchange matter? Social bond, trust and satisfaction Journal of Business-to-Business Marketing, 26 (1), pp. 57-74.
Song, H., Yang, Y., & Tao, Z. (2020). How different types of financial service providers support small and medium enterprises under the impact of COVID-19 pandemic: From the perspective of expectancy theory. Frontiers of Business Research in China,14(1), 1–27.
Suárez, V., Suarez Quezada, M., Oros Ruiz, S., & Ronquillo De Jesús, E. (2020). Epidemiología de COVID-19 en México: del 27 de febrero al 30 de abril de 2020. Revista Clínica Española, 220(8). https://doi.org/10.1016/j.rce.2020.05.007
Sullivan, E., & Wolff, E. A. (2021). Politics, pandemics, and support: The role of political actors in Dutch state aid during COVID-19. Revista De Administração Pública, 55(1), 50–71. https://doi.org/10.1590/0034-761220200558
Thorgren, S., & Williams, T. A. (2020b). Staying alive during an unfolding crisis: How SMEs ward off impending disaster. Journal of Business Venturing Insights, 14(4), e00187. https://doi.org/10.1016/j.jbvi.2020.e00187
Zaremba, A., Aharon, D. Y., Demir, E., Kizys, R., & Zawadka, D. (2021). Covid-19, government policy responses, and stock market liquidity around the world: A note. Research in International Business and Finance, 56, 101359.
