Entrepreneurship in Times of Crisis: A Comprehensive Review with Future Directions

4.1.1 Did the Global Financial Crisis Stimulate or Reduce Entrepreneurial Activity?

There is little doubt that the global financial crisis had a negative influence on traditional, established enterprises. However, entrepreneurship literature contains contradictory theoretical tensions about the influence of the economic crisis on entrepreneurial enterprises. According to the pro-cyclical viewpoint, if the economic crisis affects demand for products and services, so too will it affect any possibilities for entrepreneurship. Counter-cyclical schools of thought, on the other hand, predict that the economic crisis will encourage more people to create their own businesses as employment opportunities within conventional organizations decline.

Scholars have been looking for empirical data to support these opposing viewpoints. First, Abdesselam et al. (2017), as well as Vegetti and Adăscăliţei (2017), stated that entrepreneurial activities will certainly decrease in response to the business cycle. While observing OECD countries’ entrepreneurial activities from 1999 to 2012, these analyses were divided into pre-crisis and post-crisis relative to 2008. Entrepreneurship, which developed alongside the settlement boom from 1999 to 2008, saw a dramatic decrease during the recovery period of 2010–2012, when the unemployment rate was higher than ever, however, the rate of self-employment did not rise. The authors termed this, ‘the break of entrepreneurship dynamics’, meaning that those who were unemployed did not jump into entrepreneurial activities. However, the loss of an entrepreneurial dynamic was relatively minor in countries that had focused on more traditional industries, such as agriculture, and that had little connection to the financial industry. González-Pernía et al. (2018) tried to showcase why economic crises reduce entrepreneurship and revealed that economic decline leads to lower perceptions of opportunity, which subsequently leads to lower entrepreneurial activity. Bakhtiari (2019), who analyzed corporate-level data from 2002 to 2015 in Australia, also found that entrepreneurship had become less dynamic and riskier during the crisis. In particular, he said that immediately after the crisis, small enterprises experienced business failure and showed a significant increase in ‘exits’ from the market.

On the other hand, several scholars have argued that the economic crisis played a role in fostering the creation of new firms. Hundt and Sternberg (2014), for example, observed entrepreneurial activities in Germany for 13 years before and after the financial crisis of 2007–2008. Their hypothesis, which stated that the financial crisis can in fact stimulate entrepreneurship, was supported. Contrary to their expectations, the financial crisis did not have a differential impact on necessity versus opportunity-based entrepreneurship. Also, they noted that the supported facilitation effect could vary depending on the local human capital context.

Mühlböck et al. (2017) explained this seemingly counterintuitive argument with the term, ‘desperate entrepreneurship’. A significant proportion of entrepreneurs start their business despite the negative perceptions of opportunity, which are even more likely to increase during times of crisis. Geographically, this trend is higher in countries that are more largely impacted by economic crises and have higher unemployment rates. Following this, desperate entrepreneurs can be said to have no other choice but to start a business, resulting in the crisis essentially fostering entrepreneurship.

4.1.2 Can Entrepreneurial Firms Survive Better in a Financial Crisis?

Scholars have been interested in how well existing entrepreneurial companies can survive during a severe crisis due to contradictory theoretical forecasts. In general, the smaller the company, the less likely it is to survive. This is due to the lack of human and financial resources at the firm’s disposal. According to Cucculelli and Peruzzi (2018), large organizations can survive the crisis through cost reduction or branch reduction at the managerial level, however small businesses face a limitation in downsizing, with products and services having not yet been diversified, making the firm more vulnerable to crises.

According to the Schumpeterian view, which poses a differing perspective, the flexibility of small organizations can boost the viability of independent enterprises during an economic downturn. The hypothesis that the global economic crisis would have a negative impact was rejected by Davidsson and Gordon (2016) who stated that “for most nascent entrepreneurs and their ongoing start-up efforts, the (behavioral) effects of macroeconomic crises are far smaller than what is likely to be commonly believed” (Davidsson and Gordon 2016, 930). Simón-Moya et al. (2016) discovered, surprisingly, that entrepreneurial companies are more likely to survive the financial crisis since the crisis reduces the firm’s ‘opportunity costs’, leaving founders with no other choice but to persevere.

Bartz and Winkler (2016) provide a more sophisticated answer by distinguishing between the size and age of the entrepreneurial actor. That is, ‘small’ firms maintain higher growth rates than large firms in both times of stabilization and crisis given that flexibility becomes an advantage, however ‘young’ companies are overly market-dependent and their founder-owned characteristics are negatively affected by the crisis in a significant way.

Cefis and Marsili (2019) also investigated which company traits are more resistant to a crisis, departing from the one-size-fits-all theory that all small firms are more likely to survive in a crisis. Companies were more adaptable both during and after the crisis if innovation was incorporated within the first 2 years of the company’s inception. At this period, innovation was most effective when it focused on the technological aspect. Devece et al. (2016) made a similar point, finding that need-based entrepreneurs were ineffective in times of crisis, whereas those with a foundation of opportunity or innovation were more effective.

4.1.3 Does the Impact of a Crisis on Entrepreneurship Vary by Geography?

Recent research on entrepreneurship has increasingly shifted its emphasis to the effect of a mutual give and take exchange taking place between enterprises and the regions in which they are embedded. After summarizing the academic discussions on the subject, it is clear that corporations and their corresponding regions are developing constructive two-way relationships with one another. It was discovered that regional and national features can provide a ‘safety net’ for entrepreneurship (Ruiz-Fuensanta and Bellandi 2019; Van Stel et al. 2014). For example, Jabłońska and Stawska (2020) discovered that in Poland and the Czech Republic, entrepreneurial activity was primarily stimulated by the level of spending on regional municipalities, social welfare, and R&D, as well as the proportion of the economically active population who were unemployed. As a result, the study advised entrepreneurs to pay attention to the unique conditions of where they belong. Goschin (2020) delved a bit deeper into the post-crisis impact, discovering that, among a variety of criteria, foreign direct investments, population expansion, and the agglomeration of active firms are key components in assisting new firm survival within the first 3 years.

Bishop and Shilcof (2017) and Pisá-Bó et al. (2021) focused on whether the region of interest (i.e. urban or rural) plays an important role in the crisis-entrepreneurship relationship and found that the more urban the area, such as London, the lesser the consequences suffered as a result of the economic crisis. In urban areas, the entrepreneurship dynamic was maintained even during the crisis, and in rural areas, more necessity-based start-ups were developed due to limited employment possibilities. Furthermore, Pinho and de Lurdes Martins (2020), who investigated 44 countries during the economic crisis, argued that institutional elements inherent in a society, rather than geographical characteristics such as countries or regions, determine the genuine impact of an economic crisis. Countries that were struck more strongly by the crisis were distinguished from those that did not. The authors concluded that while the economic shock suffered by a country following a financial crisis does vary, institutional qualities (e.g. a start-up’s social image, education level, information governance) also have a key impact on new venture creation during such times.

It should be noted that some studies focused on the upward influence of entrepreneurial activity on a country or region, as opposed to a downward influence. According to Abdesselam et al. (2017), small innovators, rather than large enterprises, fuel national growth during a recovery era. Armeanu et al. (2015) examined the Romanian economy before and after the financial crisis and discovered that entrepreneurship was the primary driver of the nations’ economic recovery. Bishop (2019) discovered that entrepreneurial competency assists communities in adapting to crises, where the size and diversity of local knowledge-based enterprises plays a mediating role. In other words, it was suggested that while nurturing start-ups, it is possible to strengthen the local economy’s sustainability in times of crisis by growing a mix of varied businesses, rather than cultivating clusters that are centered in a certain field.

4.1.4 How do Individual Entrepreneurs Deal With Crises?

Despite the previous emphasis on the influence of the macro-environment, local community, and region, the importance of ‘people,’ the focal actors of entrepreneurial activities, has not lessened (Frese and Gielnik 2014; Mitchell et al. 2002). In this regard, there are research streams concerned with how global crisis conditions, such as the economic crisis, affect individual entrepreneurs. Meliou (2019) investigated women who decided to start a business during Greece’s financial crisis and discovered that material support from family members, particularly spouses, emotional support, and informational support through social connections, were all crucial. In a study focusing on developing countries, Quintillán and Pea-Legazkue (2019) discovered that the process of internationalization (i.e. whether they sell their products or services internationally) is dependent on the entrepreneurs’ emotional intelligence rather than traditional human assets, especially during the crisis. According to the finding, even in chaotic circumstances such as economic crises, the higher an individual’s emotional stability, the more likely they are to accept risky actions.

4.1.5 Crisis as a Moderator of the Previously Stated Relationship

Some research has focused on whether the association between variables that were discovered in previous entrepreneurship related literature is represented similarly or differently in the unique context of the global economic crisis (Elitcha and Fonseca 2018; Kraus et al. 2011). Martínez-Rodriguez et al. (2020), for example, discovered that the crisis had a moderating effect on how national accounting and fiscal policies influence opportunity or necessity-based entrepreneurship. Santos et al. (2017), on the other hand, conducted an individual-level study to evaluate the effects of individual efficacy, opportunity perception, and role model perceptions on initial entrepreneurial activity and found that it stayed consistent regardless of the crisis. Giotopoulos et al. (2016) discovered that at the individual level, the influence of an individual’s gender, education level, and sense of opportunity on the level of entrepreneurship changes during a crisis. During a crisis, for example, the effect of gender and educational attainment on growth intention was stronger than in non-crisis times.

4.1.6 Does the Organization Learn From Crises?

Finally, although the number is small, there has been an increasing research concentration incorporating organizational learning theory and investigating whether or not entrepreneurs and their businesses can learn from crises. Both studies in this review that conducted research on this topic viewed the 2003 global economic slump as a precursor experience to the 2007–2008 global economic downturn. During the 2008–2009 period, Brzozowski et al. (2019) found interesting changes in corporate responses. Based on organizational learning theory, they investigated how the experience of the crisis in 2003 affected the company’s subsequent response to the economic crisis of 2007–2008, which revealed that firms took more active steps in the following crisis after taking a prudent stance in the previous crisis. In a similar vein, Cucculelli and Peruzzi (2018) reported that enterprises that modified their business models following the 2003 crisis fared better during the 2007–2008 crisis. This supports the idea that organizations learn from crises.

4.4.1 How has the Pandemic Influenced Potential and Nascent Entrepreneurs’ Decisions to Start a New Business?

The first stream of literature investigates how potential and nascent entrepreneurs responded to the COVID-19 pandemic in terms of new business creation. Studies in this stream of research particularly focused on entrepreneurial intention (e.g. Ruiz-Rosa et al. 2020) and entrepreneurial activities, such as the consideration of starting a new business by potential entrepreneurs, as well as early phase activities in new firm creation by entrepreneurs (e.g. Liñán and Jaén 2022). These studies showed that despite the unfavorable entrepreneurial environment as a result of the COVID-19 crisis, entrepreneurs still managed to start businesses. A crisis impacts the creation of new firms by fostering the necessity-driven motivations of entrepreneurs, motivations that are triggered when a crisis brings about a reduction in the number of suitable income alternatives (Hundt and Sternberg 2014; Simón-Moya et al. 2016). Liñán and Jaén (2022) found that while there could be an initial decrease in overall entrepreneurial activity during the pandemic, the necessity-driven motives of entrepreneurs will likely increase soon afterward. On the other hand, Kuckertz (2021) suggested that habitual entrepreneurs, those who have established ventures several times, were the ones who sought opportunities to start new businesses even under rising uncertainty. The author confirmed that it was the entrepreneurs who perceived opportunities that were the ones to start innovative ventures during the COVID-19 crisis, despite the overall decline in entrepreneurial activities. A key, underlying theme tied to the impact of COVID-19 on entrepreneurship is that the entrepreneur’s perceptions of the crisis, and of the potential opportunities or threats at play, represented an important driver of entrepreneurship. Thus, these studies show that in addition to the various contexts and characteristics of the entrepreneurial environment that exist as a result of the crisis, how entrepreneurs perceived the environment surrounding them explained, to a large extent, their engagement in entrepreneurial activities during this time.

4.4.2 What Challenges and Opportunities did Young and Small Firms Face During the Pandemic?

Scholars found that many young and small firms, as opposed to established firms, are more vulnerable to the significant challenges brought about by shocks (Bărbulescu et al. 2021; Brown et al. 2020; Lim et al. 2020). The major obstacles discussed in the literature included difficulties in managing supply chains and difficulties in acquiring capital. These challenges were observed at the firm level, as well as within the entrepreneurial ecosystem, which includes private equity investors and venture capitalists. For example, Aftab et al. (2021) showed that small and medium-scale enterprises in Pakistan suffered from the lockdown, as well as from decreases in the demand for products and services, difficulties in managing the supply chain, challenges in maintaining employees, and from a subsequent decline in sales and profits. Brown et al. (2020) found that out of the different types of entrepreneurial finance available, seed financing was the most severely impacted by the COVID-19 crisis, meaning that entrepreneurial start-ups experienced the greatest challenges in obtaining capital.

On the other hand, studies also acknowledged the positive consequences of this global crisis. This perspective views times of crisis as something that can provide a unique environment necessary for the emergence of entrepreneurial and prosperous organizations (Cucculelli and Peruzzi 2018; Davidsson et al. 2021; Guo et al. 2020). While various governments proactively drove initiatives to slow down the spread of the disease, a variety of innovative products (i.e. testing kits) were developed and growth opportunities were formed in non-contact industries, such as digital commerce, telemedicine, and automation (Liu et al. 2020; Negrutiu 2021). In addition, some studies suggested that a crisis drives entrepreneurs to question their previously used responses, making it all the more important for them to develop ways to cope with external shocks (Kwong et al. 2019). This might mean reconstructing organizational resources to stimulate growth, particularly when confronting change (Dahles and Susilowati 2015). For example, Lim et al. (2020) suggested that a firm, as a bundle of resources, experiences a temporal imbalance of resources due to the crisis, which allows entrepreneurs to realign their firm’s resource system, allowing the firm to enter into the next phase of growth.

4.4.3 How did Young and Small Firms Respond to and Overcome the Pandemic?

A variety of studies in our review attempted to understand how young and small firms responded to, and broke through such difficult times, as not all firms enjoyed crisis-induced opportunities during the pandemic. Studies showed that a transformation of the firm represented a key factor in their entrepreneurial journey that allowed for such firms to consider new possibilities. This transformation was achieved through the adoption or innovation of business models (e.g. Guckenbiehl and de Zubielqui 2022) or technologies (e.g. Modgil et al. 2022), the adjustment of business plans (e.g. Stephan et al. 2020), and the reconstruction of resources and processes in combination with internal coordination and external support (e.g. Bărbulescu et al. 2021; Habiyaremye 2021; Meurer et al. 2022). Guckenbiehl and de Zubielqui (2022), for example, suggested six start-up types, based on their responses to the pandemic: stable beneficiaries, business-as-usual continuers, digital adjusters, adversity survivors, opportunity graspers, and lemonade makers. They also showed that the start-ups that perceived opportunities, as well as adversity in the pandemic, were the ones that engaged in business model changes by adopting or innovating their business models. Considering resilience as a resource-based capability, Anwar et al. (2021) showed that both individual resilience and inter-functional coordination enhance organizational resilience, which in turn has a beneficial impact on sales revenue, sales growth, and client retention. Bărbulescu et al. (2021) found that although start-ups were vulnerable during the COVID-19 crisis, their focus on an information and communication technology (ICT) based business allowed them to develop strong relationships with various actors both inside and outside the industry, thus further helping them to overcome challenges and to build a sustainable ecosystem in the long term. Studies showed that young and small firms, particularly those that utilized digital technologies and continuously strived for innovation, were better at responding to external shocks brought about by the pandemic (Belitski et al. 2022; Habiyaremye 2021; Khlystova et al. 2022; Modgil et al. 2022). Given that a set of papers in this review frequently mention digitalization as a key factor tied to pandemic-induced transformation, we have separated the discussion on digitalization into its own research theme.

In addition to the organizational factors fostering the survival of small and young firms in times of crisis, other studies emphasized the role of the ecosystem (Bărbulescu et al. 2021; Habiyaremye 2021; Ratten 2020a, 2020b, 2020c), given that entrepreneurs and their firms are embedded in society and that actors within the ecosystem are interdependent with each other. Some studies noted that knowledge sharing and the construction of a strong ecosystem helped firms to achieve higher performance or experience long-term growth during the COVID-19 pandemic (Bărbulescu et al. 2021; Habiyaremye 2021). For example, Habiyaremye (2021) found that enhanced knowledge sharing through cooperative learning fostered higher innovation performance and efficient resource use for the organization and its partners, both during and after the COVID-19 crisis. In summary, at an organizational level, a transformation of organizational resources and processes supported by cooperative members is needed to break through such difficult times and to allow for new opportunities. Furthermore, in the context of persistent threats as a result of a pandemic, the interconnected nature of the ecosystem can enable entrepreneurial actors to utilize local knowledge and benefit from the interdependence between actors so that they can construct the necessary responses within the community in crisis.

4.4.4 What Role did the Digital Capabilities of Young and Small Firms Play During the Pandemic?

As this long and unpredictable crisis continued, social actors struggled to gain the resiliency necessary for returning to the optimal, pre-pandemic state. Pursuing a path that returns to the former best state does not guarantee future success, especially when a crisis continues to progress. A variety of studies showed that the utilization of digital technology is a key that enables resilience as well as transformation during a crisis like the COVID-19 pandemic. Studies highlighted that digitalization assisted firms in using emergency responses as well as in responding strategically, quickly, and efficiently to societal crises, thus improving performance (Belitski et al. 2022; Khlystova et al. 2022; Modgil et al. 2022). Moreover, digital technology helped entrepreneurs and their firms to not only bring about critical changes and increase efficiency during the crisis, but also to connect to necessary support, resources, and other ecosystem participants. For example, Ratten et al. (2021) found that co-creation opportunities are a common strategy for collaboration in the sports industry during times of crisis and engaging in online interactions helped sports entities to overcome the physical limitations brought about by social distancing policies. Meurer et al. (2022) showed that when access to help was significantly limited by social distancing tactics during the COVID-19 pandemic, entrepreneurs still sought and obtained support from online communities in resolving problems, collecting critical resources, evaluating ideas in early venture stages, understanding new emerging topics, and planning. As the pandemic froze the normal functioning of society, a transformation was needed to break through such difficult times. However, this transformation cannot be limited to merely returning to ‘the old good days’, especially when a crisis continues to progress. The studies in our review evidenced that digitalization allowed entrepreneurial actors to effectively gain the cooperation of others and to adjust to a new business environment.

4.4.5 How did the Institutional Environment Affect Entrepreneurship During the Pandemic?

Although the COVID-19 pandemic has had unprecedented, devastating effects across the world, all countries did not suffer in an identical manner (Liñán and Jaén 2022; Liu et al. 2020). Scholars have come to realize that the institutional context has an important role in explaining such differences. In particular, studies have focused on formal institutions (e.g. the political system, government policy, and the quality of the business environment) rather than informal institutions (e.g. the level of corruption and cultural norms). For example, Liñán and Jaén (2022) emphasized the importance of the institutional context in transitioning entrepreneurial intention into realized behaviors. They highlighted that necessity-driven entrepreneurship is more prevalent in less favorable business environments (e.g. emerging countries, states with high fragility). Galindo-Martín et al. (2021) found that the countries that had higher levels of economic competitiveness before the pandemic also experienced more entrepreneurship and more sustained development during the pandemic due to their appropriate infrastructure, institutions, and educational and health systems.

Government policy received particular interest from these scholars as the pandemic brought about rapid government intervention from most countries to prevent the widespread transmission of the disease and to foster societal recovery. Lockdown policy, monetary policy, and fiscal policy are examples of such interventions. Stephan et al. (2020) found that the severity of country-level lockdowns had an impact on the degree of adversity faced by entrepreneurs and that those who were more severely affected enjoyed less hedonic and eudaimonic well-being, as well as more distress. Piva and Guerini (2022) showed that the reduction in new firm creation rates during the initial pandemic wave was mainly seen in areas where the pandemic was more severe, whereas lockdown policies had negative effects on firm creation rates, regardless of the level of pandemic severity. They also showed that the impact of firm support policies was negative in the regions where the pandemic was more severe, but the impacts of demand stimulus policies were positive and stronger where the pandemic was less severe. However, they observed that these effects disappeared in the second wave. Galindo-Martín et al. (2021) showed that monetary policy encouraged entrepreneurship during the COVID-19 pandemic as entrepreneurs benefited from increased loan availability and low-interest rates. They also confirmed that fiscal policies had a positive effect on entrepreneurship, but to a lesser extent than monetary policies.

The relationship between the institutional context and entrepreneurship is not limited in a unidirectional fashion. Audretsch and Moog (2022) suggested that entrepreneurship and democracy are closely linked as democracy and entrepreneurship are both fuelled by decentralized, independent, and autonomous decision-making. In particular, they argued that the pandemic allowed the government to impose restrictions on peoples’ freedoms, which is also the fundamental principle of entrepreneurship. Although Piva and Guerini (2022) separated the effect of lockdown policies from the effect of pandemic severity during different waves of the pandemic, most studies did not distinguish the effect of lockdown policies from pandemic severity and also neglected to account for the time horizon, which may play a key role in understanding how the impact of the pandemic has changed over time, depending on the relevant government policies that were enacted.

5.2.1 A Third-Party Perspective

The third-party perspective has received increasing attention in the field concerning personal crisis, such as being the target of abusive behaviors or personal aggressions (e.g. Dunford et al. 2015; Hershcovis and Bhatnagar 2017). The focus of this perspective was to uncover when and why third parties engage in helping behaviors to the victim. By extending this perspective to entrepreneurial crisis contexts, entrepreneurial firms and entrepreneurs can be seen as victimized first parties to various crises, and any surrounding stakeholders, namely the government, large corporations, capitalists, local communities, and consumers, may all fall into the third party categorization.

Particularly during times of crisis, there is a tendency for firms to desperately rely on aid from the government or financial investors to overcome the risky valley. For instance, according to Murtinu (2021), start-ups that managed to gain support from venture capitalists also obtained information about government institutional reforms more quickly, thereby achieving more favorable market evaluations. Therefore, it is critical to understand how these key crisis-savers view the focal companies during times of crisis. The third-party perspective has highlighted the importance of the third-parties’ attributions and the first-parties’ individual characteristics in determining whether or not to provide help (Mellor 1992; Skarlicki and Kulik 2004). In entrepreneurial contexts, institutions may not help if they think that firms have not adequately prepared for the macro-crisis environment or that the company is not worth helping. Therefore, future research can focus on discovering which criteria institutional actors may use to determine which ventures to save first in the face of a crisis. For example, such decision making could depend upon the firm’s diversification strategy, the entrepreneur’s past crisis-related experience, or the CEO’s willingness to sacrifice a share of their ownership.

Qualitative interviews or surveys of government officials or investors can be used in tandem with the third-party perspective to apply diverse experimental methodologies that current literature has yet to implement. As mentioned previously, third-party studies are often closely related to the cognitions of key stakeholders (Mellor 1992). Scenario-based manipulation could be adopted, where the characteristics of the business, or of the founding CEO, are manipulated. The subjects of the experiment would take on the perspective of a venture capital investor or of a government representative and decide which business they would fund, and ultimately save, amid the crisis. Such findings would hold important, practical implications for entrepreneurs in terms of improving their resiliency and survival rates via obtaining the timely support of stakeholders, particularly in the face of future crises.

In addition, the third-party perspective can shed light on valuable research themes at the individual level. Prior literature has extensively covered the personal difficulties and stresses experienced by entrepreneurs in the midst of a crisis. However, meaningful insights could be obtained by observing the feelings and responses of those closest to an entrepreneur, such as a spouse, partners inside the company, team members, as well as other founders. Given that close third-party interpretations of the situation and the emotional support that they provide can be decisive in determining the entrepreneurs’ well-being during times of crisis, this approach warrants future exploration (Hobfoll et al. 1986). For instance, employee perceptions of the founder’s efforts during a crisis may affect their unity and loyalty, and subsequently, the venture’s resiliency. From the viewpoint of consumers, which represent another major third-party (Roundy 2018), if the social value or innovative nature of the business is well-recognized, the firm may be better placed to overcome the crisis through more active consumption. We believe that utilizing this approach and considering the various third-party perspectives at play can help future research to generate novel and practical contributions.

5.2.2 A Quality-Concerning Approach

Underlying many of the discussions so far is a common belief that entrepreneurship is desired and is something that our society should nurture, especially in times of crisis. According to the reviewed articles, this is true, to a certain degree, when it comes to leading economic growth (Bakhtiari 2019), bringing about social innovation (Sedera et al. 2022), and maintaining the livelihoods of lower-income populations (Yindok 2021) in crisis. However, are all new businesses equally desirable and helpful during a crisis? According to Youssef et al. (2018), certain conditions must be met in order for entrepreneurship to have a positive effect. We suggest that the current theoretical focus needs to shift from one that tracks the number of entrepreneurial activities amid a crisis, to one that measures the quality of such activities, especially on a long-term basis.

According to research, necessity-based entrepreneurship increases significantly after a crisis (Martínez-Rodriguez et al. 2020). However, Acs (2008) warns that necessity-driven new firms are likely to negatively influence the economy’s sustainable development. This is because entrepreneurs with low levels of education or capital, particularly during a crisis, do not pioneer new ideas like opportunity-oriented entrepreneurs, but instead focus only on imitative start-ups that are easy and quick to establish (Venâncio and Pinto 2020). Omri and Afi (2020) also commented that the more these start-ups pursue purely economic profits, the more insensitive they are to environmental problems. We have observed similar cases up close during the COVID-19 crisis. Small sized mask and sanitizer manufacturers have surged due to the outbreak of the pandemic. They aimed to satisfy the rapidly increasing market demand for such products, but supply soon exceeded demand, threatening their survival due to the large amounts of unsold inventory (Aeppel 2021). Not only did this waste resources, but it also hurt employees and communities in the event of business closure. Therefore, future researchers are encouraged to observe not only the number of start-ups, but also the sustainable quality of these start-ups.

Another topic that deserves the attention of quality-conscious scholars is ‘corruption’ (Abdesselam et al. 2017) because in the midst of chaos lies the lure of embezzlement. Governments provide tax credits, loans, and subsidies to stabilize global and local crises. For example, the U.S. adopted a COVID-19 stimulus program providing $1.9 trillion of support to small businesses and individuals. Given that this financial support needed to be delivered quickly, it is doubtful that the delivered financial or material aids were used as intended. Also, it is unclear how many start-ups that received these funds ended up surviving and creating long-term value, as opposed to launching and terminating their business only to secure policy funds. After tracking 129 firms over 4 years, Stevenson et al. (2021) found that, contrary to expectations, government-granted start-ups did not have a long-term profitability advantage. Therefore, the possibility of such embezzlement in a crisis context can be investigated by referring to studies on CEO morality (“Antecedents of Corporate Scandals: CEOs’ Personal Traits, Stakeholders’ Cohesion, Managerial Fraud, and Imbalanced Corporate Strategy | SpringerLink” n.d.) or unethical behaviors that favor the company, often called unethical pro-organizational behaviors (Umphress et al. 2010).

Research on other actors in entrepreneurial ecosystems may benefit from a quality-oriented approach. During a crisis, the qualitative characteristics of the institutional environment changes swiftly, as do enterprises. Boudreaux et al. (2022) proposed the significance of examining institutional changes during crises like COVID-19 and their long-term impact. The ecological perspective revealed that the government and geographical background had a great influence on its survival, yet the majority of the attention was focused on economic qualities. However, aside from GDP, institutional actors have a number of characteristics that can determine their resilient momentum. The degrees of a government’s democracy (Audretsch and Moog 2022), morality (Massaro et al. 2022), grant policies (Srhoj et al. 2022) and public health policies (Belitski et al. 2022) may all affect the quality of formal institutions. It should not be overlooked that governments are equally prone to corruption (Liu et al. 2021). Communities, as informal institutions, have different cultural traits (Khlystova et al. 2022) or pro-social networks (Meurer et al. 2022). We hope researchers investigate not only how belonging to an economically prosperous region aids survival in a crisis, but also how these varied institutional qualities affect entrepreneurship during times of crisis.