The economics of COVID-19: initial empirical evidence on how family firms in five European countries cope with the corona crisis

Abstract

PurposeWithin a very short period of time, the worldwide pandemic triggered by the novel coronavirus has not only claimed numerous lives but also caused severe limitations to daily private as well as business life. Just about every company has been affected in one way or another. This first empirical study on the effects of the COVID-19 crisis on family firms allows initial conclusions to be drawn about family firm crisis management.Design/methodology/approachExploratory qualitative research design based on 27 semi-structured interviews with key informants of family firms of all sizes in five Western European countries that are in different stages of the crisis.FindingsThe COVID-19 crisis represents a new type and quality of challenge for companies. These companies are applying measures that can be assigned to three different strategies to adapt to the crisis in the short term and emerge from it stronger in the long run. Our findings show how companies in all industries and of all sizes adapt their business models to changing environmental conditions within a short period of time. Finally, the findings also show that the crisis is bringing about a significant yet unintended cultural change. On the one hand, a stronger solidarity and cohesion within the company was observed, while on the other hand, the crisis has led to a tentative digitalization.Originality/valueTo the knowledge of the authors, this is the first empirical study in the management realm on the impacts of COVID-19 on (family) firms. It provides cross-national evidence of family firms' current reactions to the crisis.