Determinants of Business Resilience

Abstract

Dynamic capabilities research has clearly demonstrated that businesses must adapt to change to survive. The Covid-19 pandemic has put the resilience of businesses at test. The present study uses dynamic capabilities theoretical framework to shed light on the determinants of business resilience. Results from a sample of 243 full-time managers and business owners demonstrate that businesses who are more agile are more likely to be resilient. In addition, environmental hostility positively moderates the positive relationship between agility and resilience such that this relationship is stronger when environmental hostility is high. Digitalization also showed a positive relationship with resilience. Finally, the hypothesis that digitalization moderates the positive relationship between agility and resilience such that this relationship is stronger when engagement is high was not supported due to the burnout effect of digitalization. Implications and future research opportunities of this research are offered.