Surviving and recovering in times of crisis: A resource dependence view of firm ownership

Abstract

Leveraging resource dependence theory, we examine the effects of state, foreign, and parental ownership on firm survival and recovery in the context of the COVID-19 pandemic. Utilizing data from World Bank surveys, conducted between May 2020 and August 2022, across 44 countries and focusing on small-and medium-sized enterprises (SMEs), we find that firms with state and parental ownership have a higher likelihood of surviving and growing during the pandemic, whereas foreign ownership exhibits a minimal impact. Furthermore, both state and parental ownership have a positive effect on firm growth during the pandemic but no significant effect in normal times. The nature of the ownership-performance relation changes as firms pass through the initial pandemic shocks and move onto the recovery stage. Overall, from a resource dependence perspective, our study highlights the effects of different ownership types on firm performance in the context of crisis.