Effects of quick response to COVID-19 with change in corporate governance principles on SMEs’ business continuity: evidence in Vietnam

Abstract

Purpose The purpose of this paper is to evaluate the negative impacts of the Coronavirus Disease-2019 (COVID-19) emergency on small- and medium-sized enterprises’ (SMEs) business continuity (BC) by examining the moderating role of corporate governance principles (CGP) on SMEs’ BC in the context of an emerging market. Design/methodology/approach Based on an extended literature review on the negative impacts of the COVID-19 emergency, CGP and BC studies, the authors evaluate the impact of these constructs on SMEs’ BC in an emerging market. This paper follows a quantitative approach. The study sample was composed of 334 responses covering directors, managers and owners of enterprises. The Smart PLS SEM version 3.3.2 was used to analyse the data from SMEs of Vietnam in the year 2021. Findings The findings of this study clarify the areas of the COVID-19 consequences that negatively affect the BC. In addition, this study reveals that CGP moderates the links between COVID-19 outcomes and BC, whereby good CGP can facilitate a business to reduce the adverse effects of COVID-19 on BC. In addition to this, good CGP can help a firm to enhance its capability to respond to fluctuations in the external environment of the business. Originality/value To the best of the authors’ knowledge, this is the first research that examines the moderating role of CGP. The originality of this study is that it gives an insight into how SMEs in an emerging economy overcome the adverse effects of the COVID-19 emergency on BC to keep their business going, and moreover, have the ability to move towards sustainability in today’s challenging context. This study provides the theoretical and managerial implications that may be of great interest to the academics, business practitioners and policymakers.