1. Introduction
Similar to large businesses, micro- and small enterprises (MSEs) positively contribute to the economy and its gross domestic product through the creation of job opportunities and the generation of income in various parts of the world, including developing countries [1,2,3]. Despite the positive role of MSEs in the economy, they are the most affected by uncertainties, instability, conflicts and diseases such as COVID-19 [4]. MSEs are vulnerable and lack financial and managerial resources to use in unexpected situations and challenging times [2]. As MSEs have a limited size and scope, they are more vulnerable to crises compared to other enterprises, such as big companies [4,5,6,7].
According to [4], most MSEs go bankrupt due to the limited support provided by the government. Furthermore, MSEs have limited capability and resources to recover from crises and challenges, especially those countries with political instability, higher poverty rates and economic challenges. Different natural disasters influence MSEs, negatively impacting business activities, their survival and continuity [4,6,7,8,9].
It should be noted that MSEs are less prepared for risks and receive less institutional support, particularly in developing countries that lack risk management and crisis management cultures [8,10]. Most MSEs lack the resources and expertise to deal with risks and uncertainties; thus, they are vulnerable to shocks. Hence, they need to be more aware of these risks and understand how to enhance their business continuity management [8,10]. The continuity of MSEs is a challenging issue. Hence, training and capacity-building programs are needed for micro- and small entrepreneurs, which strengthen their management skills, help them adapt to innovative practices and implement strategic planning processes, which, in turn, help their enterprises survive during economic challenges and ensure better resilience [7].
More focus needs to be directed towards developing continuity strategies so that MSEs can continue operating during challenging times [11], especially with the limited availability of previous research on such topics in the extant literature [11,12]. Most previous studies discussed only large-scale businesses and concentrated on problems caused by management [11]. Limited attempts were made towards MSEs and in developing contexts with adverse conditions.
Accordingly, more attention and focus have recently been paid to how businesses can develop resilience to deal with crises and challenges [9,13]. Key factors contributing to resilience that have been investigated include personal characteristics and external factors, such as financial literacy, entrepreneurial competency, self-efficacy, locus of control, connection, communication and individual and organisational success [14,15,16]. Other factors that examine the survival of businesses include innovation, the experience of the business, strategic networks, international trading and access to affordable finance [17,18,19,20]. Only a few studies have examined these factors during challenging times.
Notably, as MSEs are volatile and weak, they need to concentrate on developing competencies and skills that help them sustain themselves during complex scenarios and become capable of standing with high resilience to recover from crises effectively. In this case, MSEs may need to develop clear strategic clarity [21] represented in a transparent defining core of purpose (DCP). This helps them understand their business well and accordingly set the achievable vision, mission and long-term plans that ensure good performance and survival of their business, as well as gain a better competitive advantage [22].
It is important to note that the concept of a clear core purpose is similar to governance and strategic planning, which involves proper strategic planning, setting clear objectives and finding the best methods to achieve them to succeed in the business [11,23]. In other words, having clarity in the strategies of the business represented in the clear core purpose of the business helps entrepreneurs effectively utilise available resources, make informed decisions, remain resilient during challenging times and adverse conditions and continue operation [11,24].
Another significant factor needed for micro- and small entrepreneurs and their enterprises during crises and adverse conditions is coping with unexpected challenges (CUC), especially with the limited knowledge and understanding of how entrepreneurs manage their role expectations and the stress they receive during their business operations [25]. Applying effective strategies in business, such as hiring temporary assistance and balancing work and family tasks, contributes to good business resilience (BR) and business economic sustainability (BES) [26]. Having flexible coping strategies helps a business grow, sustain itself and face challenges, especially during conflict [27].
More specifically, micro- and small entrepreneurs might need to understand the factors necessary for their resilience and businesses, which might reduce business risk [28]. These strategies might include implementing precise risk management, developing strategic alliances, developing good networks and implementing digitalisation in the business [29,30]. Hence, this study aims to fill the available literature gap by focusing on MSEs that are mainly ignored in the literature, as most of the literature focuses on medium and large enterprises in developing countries. Second, it attempts to understand how CUC and DCP influence BR and BES among MSEs in Yemen.
Yemen is an emerging Arabic country suffering from various challenges, including poor infrastructure, a high poverty rate, unemployment and poor literacy [31]. Yemen has been facing ongoing internal conflicts and instability since 2015, negatively influencing the MSE sector, which accounts for a large portion of the total enterprises in the country [32]. This resulted in the closure of 26% of the total businesses operating in the MSE sector, making about 42% of women-owned enterprises less resilient [31]. Huge losses have been incurred in the MSE sector, including the losses of many small enterprises’ assets and properties, resulting in halting their business operations. According to [33,34], Yemen’s MSE sector was severely affected by the ongoing internal conflict through the loss of production assets and available infrastructures, limited financial support and a shrinking consumer base. This, in turn, negatively influenced income, jobs, poverty mitigation, gender equality, local services and goods supply. This situation led to the poor resilience of MSEs. It required them to search for alternative mechanisms that could help them continue operating, remain resilient during crises and conflict and achieve their BES.
Additionally, this internal conflict resulted in the loss of the lives or injury of business owners, loss of business customers, loss of business demand and skilled personnel, poor electric services, unstable energy supplies, limited access to finance and many other challenges [1]. In addition to all the previously mentioned challenges, MSEs in Yemen do not have a clear or specific standard definition for themselves [1] to categorise them into other entities in the country and compare them globally. According to [32], MSEs in Yemen are classified as micro for those with 1–3 employees and small for those with 4–9 employees, which we follow in this study. MSEs in Yemen operate in different sectors, such as fisheries, services, retail and wholesale [32], and they need better access to resources and economic empowerment opportunities to allow their businesses to continue operating [35].
Furthermore, the literature on Yemen’s enterprises and their influencing factors is limited, especially during challenging times and adverse conditions, such as key factors influencing BR and leading to BES. It is important to note that many studies in Yemen were about small and medium-sized enterprises (SMEs), leaving micro-enterprises unexplored, which makes this study a novel contribution. Among the limited literature irrelevant to this research, ref. [36] focuses on market orientation and SME innovations, while [37] concentrates on the benefits and barriers of e-businesses among SMEs. One study revealed poorly the current status of SMEs in Yemen and did not offer any solid recommendations for SMEs’ resilience and survival [38]. Another study checked how human capital, SME performance and customer relationship management interact [39].
Limited formal support systems, such as financial support and training, indicate that micro- and small entrepreneurs need to depend on internal factors, such as developing high resilience and a strong sense of purpose to survive and sustain their businesses. Additionally, this research allows for an understanding of key factors that contribute positively to reducing MSEs’ failure rates and strengthening resilience, ultimately leading to a better economy. This study is considered unique, as it is one of the limited attempts to investigate influential factors for MSEs’ resilience in Yemen, considering DCP and CUC as antecedents for MSEs. This research explicitly answers how CUC and DCP positively influence BR and BES among MSEs. This study is organised as follows. Following the introduction, the literature review and the development of hypotheses are reported, followed by the research methodology, analysis of data and interpretation. Finally, a discussion and conclusion follow.
2. Literature Review and Hypothesis Development
2.1. Theoretical Background
This research is grounded in the resource-based view (RBV) theory. The RBV is a strategic management theory that assumes that an enterprise’s internal rare, non-substitutable, valuable and inimitable competencies and capacities are key factors that enhance and drive the development of the company’s sustainable competitive advantage. Companies wishing to achieve or generate competitive advantage must explore their non-substitutable, rare, inimitable and valuable resources and best utilise them in the company instead of depending on external resources [40,41,42].
Accordingly, the RBV in this research provides a framework that explains how DCP and CUC act as internal resources and competencies that strengthen the resilience of MSEs, leading to better and higher BES. In other words, micro- and small entrepreneurs with excellent CUC skills and abilities can better withstand difficult situations. This ability is rare and inimitable, particularly in a challenging business environment and in a country such as Yemen with political instability. To elaborate, entrepreneurs who better cope with unexpected challenges can quickly adjust their strategies and operations in response to changing market conditions, ensuring that the business remains relevant and competitive. They can also identify possible risks, develop contingency plans, think creatively in challenging situations and manage financial, human and operational resources to ensure business continuity during adverse conditions. High skills in CUC allow them to have strong networks with suppliers, customers and peers during crises.
Furthermore, these micro- and small entrepreneurs, able to identify core purposes, tend to develop capabilities that help them make the right decisions and keep the business focused, even during challenging times, such as war and other adverse conditions. A clear core purpose directs all efforts to the business vision, values and goals, allowing the business to receive maximum benefits and deal with difficult situations more smoothly. In other words, entrepreneurs with explicit core purposes can have better direction in decision-making. They can better prioritise actions that align with their mission and values, especially during crises. Entrepreneurs with clear purposes tend to develop commitment and engagement better, which are crucial during challenging times. A clear core purpose also motivates maximising brand loyalty, which can sustain sales even during downturns.
Businesses need to prepare themselves for adverse conditions by building essential capacities and acquiring appropriate decision-making knowledge related to resilience [43]. Entrepreneurs with explicit purposes and coping abilities tend to make their businesses more sustainable, resilient and profitable and can obtain a competitive advantage for their companies [43,44,45].
2.2. Hypothesis Development
2.2.1. CUC, BR and BES
While entrepreneurship is believed to be a good opportunity for making money, it is also a source of stress that needs to be mitigated by providing the necessary support to help entrepreneurs deal with the emotional aspects of business ownership, as managing this stress will assist businesses and owners of the business [46]. In this regard, understanding business strategies and their links to the sustainability and resilience of businesses is essential, especially with limited knowledge about how small enterprises deal with challenges during crises and unexpected events [25]. This research defines CUC as an individual’s skills and ability to effectively manage and adapt to unexpected challenges, stress or diversity in their environments. This includes staying productive under pressure, tolerating uncertainties and maintaining persistence during difficult times. For entrepreneurs to manage their businesses effectively, many strategies can be applied; nevertheless, the effect of these strategies on business performance remains unclear [25]. Micro- and small entrepreneurs need to understand specific strategies essential for minimising their business operational risks, which can negatively affect business sustainability [28].
More specifically, according to [29], to achieve resilience among small enterprises, there is a need to have active risk management, develop strategic alliances and implement digitalisation in businesses. This confirms that micro- and small entrepreneurs capable of developing capabilities can better contribute to business entrepreneurial competencies, especially during adverse conditions. According to [1], if small and micro-entrepreneurs develop recovery capability strategies, they can develop entrepreneurial competencies that help them manage the business more effectively and apply the right practices, leading to better business outcomes. Additionally, according to [47], commitment positively affects entrepreneurial resilience. He states that resilience also positively influences the social, economic and environmental performance of small coffee shops in Saudi Arabia. His findings also revealed the ability of resilience to mediate the relationship between commitment and economic, social and environmental performance. The findings of [47] align with this research by assuming that CUC positively influences BR. In other words, commitment is the driving force for micro- and small entrepreneurs; it helps them develop more determination, dedication and persistence to mitigate and succeed in challenging times. This, in turn, will let entrepreneurs sustain and defeat any challenges that might occur, resulting in more sustainability, a higher level of satisfied customers and low operational costs. Furthermore, a systematic review [48] demonstrated that resilience is obtained through the learning process when facing difficult and unwanted situations and crises. Hence, entrepreneurs who learn from experiences can better cope with challenges and prepare to deal with them. According to [25], proactive strategies, such as increasing effort or adjusting expectations, positively influence business performance. In addition, individuals who ignore expectations or challenges rather than adjust them may lead to business economic unsustainability and low resilience.
A study about MSEs in the Philippines reported that despite MSEs adapting technologies to promote their products and services, they still face insufficient cash to continue their operations effectively [2]. He concluded by stating that the ability of micro- and small entrepreneurs to adjust to change and seize available opportunities helped them deal with external and internal shocks, and it is also beneficial for business performance [27]. Researchers who used data from 1997 to 2000 from the national family business survey to check the adjustment strategies among business managers and households reported interesting findings [26]. They reported that when comparing surviving and non-surviving enterprises, it was found that the surviving businesses succeeded because they applied effective business strategies, such as hiring temporary assistants and balancing family demand with work activities. This indicates that effective coping strategies may contribute to BR and BES.
Based on the above discussion, it is argued that developing coping strategies allows MSEs to run resilient businesses capable of dealing with challenges, resulting in better outcomes. Hence, we formed the following hypotheses:
Higher levels of CUC contribute positively to BR among MSEs;
Higher levels of CUC contribute positively to higher BES among MSEs;
BR positively moderates the relationship between CUC and BES.
2.2.2. DCP, BR and BES
While MSEs struggle to survive and continue operating during crises and challenging times, the need to understand the key factors that enhance their resilience and sustainability increases. As indicated earlier, MSEs are weak and volatile; in the absence or limitedness of institutional support, the need to motivate internal factors to substitute for them appears. In such a scenario, DCP can act as an internal element that serves as a source for the resilience and sustainability of a business. DCP, in this research, is the ability of micro- and small entrepreneurs to articulate clear missions, establish values and formulate visions for their businesses. These factors allow entrepreneurs to understand why their businesses exist and ensure that these visions, missions and values align with actionable strategies necessary for seizing available opportunities, recovering from setbacks and challenges and achieving long-term goals.
It is important to remember that the concept of DCP for a business is similar to the idea of governance and strategic planning, which is defined as setting specific objectives and finding the best method to achieve these objectives [11,23]. As governance and strategic planning guide individuals in making the right decisions, utilising available resources and allocating them, having a clear core of purpose assists micro- and small entrepreneurs in remaining resilient and concentrated during adverse conditions. Micro- and small entrepreneurs capable of continuously adapting, monitoring and planning for external and internal surroundings can better utilise their resources, make correct business decisions and sustain positive business growth [11,24].
Defining a core purpose also allows businesses to explore innovative ideas and technologies and develop new marketing strategies that enhance their ability to survive during financial crises [49]. In addition, having a clear core purpose helps increase operational resilience by guiding individuals to make enhanced decisions about resource utilisation and allocation, ensuring that operations remain aligned with long-term objectives. This is supported by [50], who confirmed that operational resilience and strategic agility positively influence the performance of MSEs and business continuity. Empirically, According to [50], strategic agility allows SMEs to pivot and adapt their business model in response to market changes. This ability is crucial for marketing business continuity and performance during uncertainties. This agility can be achieved by having a clear core purpose for the business. Additionally, according to [11], micro- and small entrepreneurs with precise strategic planning tend to have better directions and governance for their businesses, allowing them to make informed decisions and help set up the right business strategies.
Furthermore, according to [49], individuals with a clear long-term strategic vision and clear communication can easily develop better social capital, which helps the business sustain itself during crises and difficult times. Moreover, business owners with a clear core purpose can develop a sense of collective purpose necessary for navigating crises, which helps them provide directions and clarity that aligns available effort and commitments towards achieving business objectives and developing a resilient business. According to [22], having clarity in business strategic management is mainly considered in big businesses rather than small businesses; however, having strategic planning and clear business goals is needed for any business, regardless of its type or size, to ensure good performance, gain competitive advantage and obtain better economic results. According to [9], entrepreneurs capable of designing sustainable strategies and processes can contribute to developing more resilient businesses and ecosystems.
Finally, according to [47], there is a positive relationship between commitment and resilience and economic sustainability. This finding aligns with this study’s objectives and findings. From the above discussion, the author argues that micro- and small entrepreneurs with better DCP can contribute to making better resilient businesses with better economic sustainability. Accordingly, the following hypotheses were assumed:
Higher levels of DCP contribute positively to BR among MSEs;
Higher levels of DCP contribute positively to greater BES among MSEs;
BR positively moderates the relationship between DCP and BES.
2.2.3. BR and BES
Resilience, in general, indicates individuals’ or organisations’ ability to deal effectively with shocks, disruptions, setbacks and unplanned changes, regardless of whether external or internal [51,52]. In this research, BR is defined as the ability of MSEs to adapt to changing unstable environments effectively, deal with uncertainties, recover rapidly from the harmful effects of crises and continue operating smoothly. It involves using essential strategies such as effective cash management, adopting necessary technological tools, developing solid marketing plans and best utilising available resources to ensure survival and economic sustainability for the business despite challenges. BR is essential for business continuity and survival, as it enhances its ability to recover from setbacks and allows smooth operation, especially during disruptions. The extant literature has emphasised the importance of resilience in an enterprise’s economic, social and environmental performance. For example, according to [2], planning BR is significant for micro- and small entrepreneurs because it ensures that they can adapt and respond to situations, which, in turn, results in business continuity and effective operations; it also helps restore and resume activities after certain unwanted situations. Resilient small enterprises can quickly adapt to a continuously changing market, grab available business opportunities and recover from previous experiences [7]. Recently, BR and the survival of businesses in conflict zones caused by different crises have become significant issues for researchers interested in resilience entrepreneurship and business sustainability [13,53].
According to [1], micro- and small entrepreneurs capable of maintaining good network ties and developing better recovery capacity will create better entrepreneurial competency that significantly influences business continuity and survival, resulting in more profit and a better economy. According to [47], resilience among small cafe shop owners positively and significantly affects social, environmental and economic performance. It also mediates the relationship between commitment and economic performance. Similarly, [54] confirmed that entrepreneurial resilience positively influences personal and organisational success. According to [15], resilience positively influences small enterprises’ sustainable performance. It is important to note that operational resilience and strategic agility contribute positively to the better performance of MSEs, which finally leads to better business continuity and survival [50].
In general, resilient businesses can better innovate and discover new methods, and innovation helps improve operations, reduce costs and improve the business’s overall performance. Once resilience is developed, innovation can be developed, which translates into better economic and environmental performance [55]. Resilience can be enhanced by interventions such as financial support [13].
From the above discussion, the author argues that if micro- and small entrepreneurs develop better resilience, they can maintain resilient businesses capable of generating better economic income and long-term sustainability, even during challenging times. Accordingly, the following hypothesis was developed:
BR positively influences BES.
2.3. Conceptual Model of This Study
Figure 1 provides a graphical representation of the study model. CUC and DCP are independent variables of this research, BR is the mediating variable, and BES is the dependent variable.
3. Research Methodology
3.1. Sample and Data Collection
Based on this study’s objectives, this study follows the deductive approach and quantitative method for selecting the sample and collecting the data to ensure the right way to collect data and test the hypotheses. This study collected a sample of 303 respondents from MSEs operating in different locations in Sana’a, considered the capital of Yemen, hosting more than 300,000 enterprises. The sample was collected only from MSEs.
MSEs in Yemen are not organised, and there is no proper record or database that systematically lists their existence and allows locating them and finding their locations. In addition, there are no precise details for contacting the business owners of these enterprises. Furthermore, with the current unstable situation in the country, many of these MSEs are either closed or partially affected; therefore, it was challenging to collect data randomly. Accordingly, a combination of convenience and snowball sampling was applied to collect data to ensure maximum coverage of the sample respondents. Initial participants were chosen based on their accessibility, and they were subsequently requested to refer to other businesses, allowing this study to reach a more diverse sample.
These two sampling techniques are considered non-probability sampling and are appropriate in such situations, especially with the limited time and effort of the researcher [56,57,58]. Data collection was completed with the help of an online questionnaire and a physical visit to the MSEs’ locations. The researcher ensured that the respondents were either business owners, business representatives or decision-makers who knew the business and its operation well or had the full right to respond to the questionnaire to ensure valid and reliable responses.
The data collection process lasted two months, from September to October 2024. The researcher ensured that the respondents were volunteers responding to the questionnaire and that the questionnaire was straightforward in its contents and had no bias or ambiguous information. The researcher also conducted a pilot study with 25 questionnaires to ensure the suitability of the questions used as measures and their clarity for the respondents. It is also important to note that the questionnaire was originally in English and translated into Arabic to suit the context of this study. The questionnaire’s content was translated by an authentic translator, who checked and verified it carefully before sending it to the respondents. Finally, according to [59], the sample collected was considered adequate.
3.2. Measures of This Study
After a careful review of the available literature regarding the proposed model and its concepts, relevant measures were selected to measure this study’s concepts. Both CUC and DCP were adopted from the study of [60], while the concepts of BR and BES were adopted from [51,61], respectively. The responses to the measures were collected using five-point Likert scales. An example of the measures used for measuring the concept of DCP included ‘I can articulate the vision and values of my business’, and for the concept of CUC, it was ‘I can tolerate unexpected changes in business conditions’. Regarding BR, an example of the measures used included ‘my business regularly adopts new marketing techniques to adapt to changes’. Finally, for the concept of BES, an example was ‘My business sales have been increasing’. All of these measures reported acceptable validity and reliability; hence, they were employed in the research.
4. Analysis and Results
4.1. Descriptive Statistics
Table 1 shows the respondents’ profiles. It indicates that most are male (78.2%), and 21.8% are female. Concerning marital status, the findings revealed that 53.1% were single, followed by married respondents at 44.6%, and 2.3% were those who were neither married nor single. With regard to the respondents’ age findings, it was shown that the most significant respondents were aged between 21 and 30 years (58.1%), followed by 22.8% for those aged between 31 and 40, 13.9% of the respondents aged less than 20 years, 4.3% aged between 41 and 50 years, and finally 1% were more than 50 years of age. Regarding the respondents’ education levels, the highest percentage was for those with secondary school certificates (42.2%), followed by 36.3% for those with bachelor’s degrees. Diploma degrees, primary and middle school and higher education had percentages of 12.9%, 7.6% and 1%, respectively. Regarding the age of the business, almost half of the businesses surveyed reported having less than 5 years of experience (50.8%), followed by 28.4% with 6–10 years of experience and 12.5% with more than 20 years of experience. Regarding the number of employees in the business, it was found that about 84.2% of the enterprises had 1–4 employees (micro-enterprises) and 15.8% had 5–9 employees (small enterprises). Finally, the business sector analysis showed that 70% of respondents were from the retail and wholesale sectors, 17.8% were from the service sector, and 12.2% were from businesses operating small crafts and agricultural projects, flower shops, nurseries and others.
4.2. Data Analysis Approach
This study applies partial least square–structural equation modelling (PLS-SEM) for data analysis of the developed hypotheses, as well as the bootstrapping technique for testing the hypothesis. In PLS-SEM, there are two essential steps, namely measurement and structural models; these steps have different tools and procedures. The section below explains them in detail.
4.2.1. Measurement Model
The researcher began the measurement model analysis by checking the internal validity and reliability of the study variables. Checking the internal consistency and reliability of the variables used in the study is an essential step, with the help of Cronbach’s alpha (CA) or composite reliability (CR). It is always recommended that both CA and CR have a score of 0.7 or above to ensure good representation and consistency of the questions used to measure a variable [59]. Following the evaluation of CA and CR, it is recommended to check the convergent validity of these variables using average variance extracted (AVE), which examines how much variance in the items is explained by the study’s variables compared to random error. The findings reported in Table 2 show acceptable results for CR and CA, with values above 0.7, while AVE was above 0.5, except for BR, which was slightly below the threshold of 0.5.
Following an internal reliability evaluation, an assessment of the items’ reliability is needed to understand the contribution of every single item to its construct, which will be executed by testing the factor loadings of the construct indicators. The recommended threshold for the accepted factor loading of an item is 0.7, while 0.6 is also acceptable, particularly in exploratory research [59,62]. The findings from testing the items’ factor loadings, reported in Table 3, indicate that all the item loadings met the threshold decided earlier.
It is also recommended that the discriminate validity of the constructs be examined by analysing how this study’s variables are distinct and different from each other. This test was performed using the heterotrait–monotrait ratio (HTMT) test, which assumes a threshold; the construct HTMT should be lower than 0.85 to ensure the availability of good discriminate validity [62]. Table 4 shows good HTMT.
It is also necessary to examine the multicollinearity among this study’s independent variables in relation to the dependent variables, emphasising that there should be no high correlation among them. For this purpose, a variance inflation factor (VIF) test was conducted. According to the results reported in Table 5, all study variables’ values were below 3, which is considered the VIF value threshold [59], indicating no multicollinearity in the study model.
4.2.2. Structural Model
The first step in the structural model was to test this study’s hypotheses using the bootstrapping method. Table 6 shows the results of the tested Hypotheses (1–7) and confirms that all the proposed hypotheses, including the mediation ones, were accepted. Further details of their results are discussed in Section 5.
The structural model analysis also emphasises testing the R-square and F-square. The finding from the R-square test indicated that CUC, DCP and BR in the model explained about 33.3% of the variance in BES, indicating the presence of greater prediction power. In comparison, CUC and DCP explained about 22.8% of the variance in BR, confirming the presence of moderate explanatory power, according to [63]. The ability to explain only about 22.8% of the variance in the BR indicates other factors that contribute to defining the BR.
Concerning the finding related to F-square, which reports the effect size of the predictors, it was reported that BR has a medium effect on BES (f2 = 0.147), while DCP (f2 = 0.045) and CUC (f2 = 0.033) have low effects. For BR, CUC indicates a small effect (f2 = 0.101), and DCP has a negligible impact (f2 = 0.066), according to [63].
The Q-square test was also checked to ensure good predictive relevance, and the results showed that the Q-square had values greater than zero, ensuring that the model had good predictive relevance. Common method bias (CMB), an essential test for checking the level of bias in data, is necessary. Accordingly, the CMB was tested to investigate the level of variance using Harman’s single-factor test. The results reported that among other factors, the first factor extracted about 29.25% of the variance in the study data, which is lower than the threshold of 50% specified by [64], confirming no chance for CMB in the study data. In addition, the result of the correlation matrix was below the threshold of 0.90, confirming no bias in this study. Figure 2 shows the structural model.
Table 7 shows the correlations among the study variables, and it indicates that all the variables have a good moderate correlation among themselves.
5. Discussion and Implications
5.1. Interpretation of Findings
In this research, seven hypotheses were developed and tested, including the mediation hypothesis. The findings of these hypotheses are interesting. These are presented and discussed below.
The first hypothesis (H1) assumed the presence of a positive relationship between CUC and BR, which was confirmed (β = 0.311, p < 0.05). This finding indicates that micro- and small entrepreneurs with the ability to cope with unexpected challenges can better develop resilient businesses capable of sustaining in challenging environments and overcoming available business challenges. In other words, high resilience helps businesses easily and quickly recover from setbacks, continue operating successfully during crises and adapt to changing conditions. When micro- and small entrepreneurs possess coping skills, they can develop necessary strategies encompassing contingency plans for managing common risks or economic downturns, dealing with resource limitations and expanding their business network. This enhances BR, enabling them to sustain and stabilise their operations despite adversity. This finding aligns with the statements of [25,26,27].
The second hypothesis (H2) proposed a positive connection between CUC and BES, and the finding confirmed it (β = 0.173, p < 0.05). This finding confirms that if micro- and small entrepreneurs have a remarkable ability to cope with unexpected challenges, they can contribute more positively to sustain their businesses, generate more profits and income and maybe create more employability. More precisely, individuals with excellent coping skills contribute to business sustainability by effectively managing available cash, making effective long-term decisions, quickly adapting to disruptions and reducing operational and financial losses and costs during challenging times. They can also maintain good relationships with customers, suppliers and other stakeholders. Finally, they can allocate resources and use them more effectively. This finding matches the arguments of [1,25,29].
Concerning the third hypothesis (H3), it was assumed that BR can positively mediate the relationship between CUC and BES. The finding confirmed the existence of a significant positive relationship (β = 0.111, p < 0.05). The approval of H3 confirms that when micro- and small entrepreneurs possess the ability to deal with unexpected challenges, it becomes easy for them to build resilience, which in turn leads to developing a resilient business using different strategies, such as managing cash, making solid decisions for their enterprises, learning from past bad experiences, adapting quickly to change and developing innovative methods, which lead to more profit and better business with long sustainability. The H3 findings confirm that CUC alone cannot fully determine economic sustainability. Instead, its impact is strengthened when BR is incorporated as a facilitator. BR reduces operational costs during crises, maintains profitability and financial stability and helps businesses grow despite challenges. This finding is supported by [25,47].
The findings related to the fourth hypothesis (H4) also reported the presence of a significant positive relationship between DCP and BR (β = 0.251, p < 0.05). This finding indicates that micro- and small entrepreneurs capable of defining their core purpose tend to develop their business values, vision, mission and goals better and can develop clear strategies with sustainable orientations and more resilience. DCP guides entrepreneurs to work effectively, reduces confusion and provides a better business environment with more motivation to execute tasks effectively. Having a high level of DCP indicates a clear understanding of business strategies, which develops greater resilience through a clear sense of the business’s purpose. High DCP helps clarify business decision-making during crises, guides the proper use of available resources and helps create better alignment with stakeholders, customers and employees. In addition, clarity of purpose is considered an intrinsic motivation for micro- and small entrepreneurs, providing more commitment and determination to face challenges during adverse times. This aligns with the arguments of [11,49,50].
With regard to the fifth hypothesis (H5), the findings reported a positive and significant influence of DCP on BES (β = 0.198, p < 0.05). The finding is logical; the more micro- and small entrepreneurs develop clear core purpose, the more they develop clear goals, vision, mission and working strategies for their businesses, which help direct their business activities and decisions. This helps them make the right decisions that will translate into good relationships with customers and suppliers and reduced costs that generate more profits and maintain higher sustainability. In other words, higher levels of DCP allow MSEs to manage their budgets carefully and best utilise their available resources based on their decided mission, vision and objectives. DCP also ensures that business activities are executed per the plan set, leading to the implementation of the realistic decisions anticipated earlier. Furthermore, DCP contributes to developing a competitive advantage by focusing on specific areas, products or services and helping entrepreneurs think strategically and plan appropriately for the future. These statements align with [11,21,49].
Concerning the sixth hypothesis (H6), it was found that BR positively and significantly partially mediated the connection between the assumed relationships (β = 0.089, p < 0.05). This finding confirms that DCP has a direct influence on BES. Nevertheless, when BR is used as a mediator, the influence on BES further increases as a result of the influence of BR. In other words, DCP improves economic sustainability and enhances its effect by improving BR. Businesses with clear DCP tend to develop better BR, which in turn leads to better financial sustainability. DCP, through resilience, leads to better decision-making and better outcomes. This is in line with [21,49].
Finally, the seventh hypothesis (H7) confirmed that there exists a positive and significant association between ER and BES (β = 0.356, p < 0.05). This finding highlights that BR is a key factor in the economic sustainability of MSEs. In other words, MSEs capable of developing more significant levels of resilience tend to achieve sustainability better and survive in the market, especially during crises. BR allows for new and innovative ways of reducing operational risks that lead to increasing profits and providing more job opportunities. Higher resilience means better risk management, the ability to develop contingency plans and the ability to recover from setbacks and disruptions; this is in line with [2,7,47].
5.2. Theoretical Implications
The limited extant literature about MSEs and their survival, continuity and resilience in developing countries during adverse times makes this research a significant contribution. More specifically, this investigation is one of the minimal works contributing to the literature with a comprehensive model combining CUC, DCP, BR and BES to support MSEs’ economic sustainability and survival during challenging times and in unstable states such as Yemen. This study gives guidelines and suggestions to policymakers, entrepreneurs and various stakeholders on the importance of CUC, DCP, BR and BES for the sustainability of MSEs in adverse conditions. This article also provides a solid grounding and motivation for other researchers to continue investigating MSEs from different points of view by building on the model of this study.
This study also provides empirical evidence of BR’s ability to partially mediate CUC, DCP and BES. This confirms that BR is a dynamic capability linking external economic sustainability and internal practices. It also emphasises that having a clear purpose and skills for coping with challenges could lead to better MSEs’ resilience and better economic sustainability. This study further contributes to the theories of the coping business by confirming that adaptive behaviours and strategies for dealing with unexpected challenges are reactive and can also be proactive in enhancing resilience and long-term sustainability. Finally, the findings of this research add new insights into RBV theory by confirming that BR acts as a key resource that is considered essential for business continuity and sustainability.
5.3. Practical Implications
Based on this study’s findings, specific practical implications can be drawn. First, BR was found to be an effective determinant for enhancing BES. Accordingly, micro- and small entrepreneurs should focus on building resilience among themselves to help practise and apply the appropriate strategies necessary for managing resilient businesses during challenging times and ensuring better economic outcomes. Enhancing resilience among micro- and small entrepreneurs reflected in their enterprises can take different forms, including providing adequate business training on adaptive strategies and risk management. The provided training may also include enhancing the skills needed to develop contingency plans that assist entrepreneurs in dealing with uncertainties and challenging tasks that ultimately reflect the resilience of businesses. Furthermore, as CUC and DCP have been proven to positively influence resilience, micro- and small entrepreneurs, in cooperation with other developmental organisations, may work on developing coping strategies and their core business purposes. More specifically, entrepreneurs need to focus more on maintaining good relationships, networking and creating good industry connections to gain more knowledge and learn adequate strategies for managing business challenges effectively. They also need to learn from past failures and avoid repeating similar mistakes.
Additionally, micro- and small entrepreneurs need to focus more on defining clear values and goals for their businesses, regardless of their type or size, as this has proven to be an effective strategy for making the right decisions in the industry. They also need to set clear long-term strategies and operations that align with an explicit core purpose to get directions for their businesses. As a conclusion of this research, policymakers need to develop capacity-building programs to build entrepreneurs’ resilience and skills to face business challenges. They also need to provide logistical and financial support to help them align with their core purpose and strengthen sustainability during challenging times. Finally, there is a need to enhance best business practices among MSEs to reduce operational costs and increase success opportunities, especially in crises.
Additionally, policymakers in the context of this study need to focus on developing stability-focused public policies, providing emergency financial support for micro- and small enterprises and working on entrepreneurs’ capabilities by offering training workshops and mentorship initiatives. In cooperation with development programs, policymakers may also focus on enhancing microfinance programs to support micro- and small businesses and partner with other financial institutions, such as commercial banks. There is also a need to allow better business networks and public–private partnerships to enhance business growth. Policymakers must look at other countries’ long and successful experiences in the small and micro-sectors and apply their strategies supporting micro- and small enterprise sectors, such as Rwanda and Afghanistan, to ensure better resilience and economic sustainability for businesses. Saudi Arabia’s 2030 vision and policies implemented during COVID-19 were considered significant in supporting MSEs; hence, they must be assessed and replicated, if possible.
6. Conclusions, Limitations and Future Research
As stated earlier in the previous literature, MSEs make a significant contribution to the economy, especially in developing countries. Still, with this positive perception, it has always been noted that MSEs remain weak and volatile and may collapse at any time quickly, particularly in scenarios characterised by political instability and conflict zones. Hence, understanding how to enhance MSEs’ resilience to ensure continuity and sustainability is an attractive motive for research. To meet the objective of this research, a conceptual model combining CUC, DCP, BR and BES was developed to examine the interactions of these concepts in an unstable country such as Yemen, which is surrounded by many political and internal issues. The findings reposted were inspiring. All the assumed propositions were accepted, including the mediation hypotheses, which confirmed the presence of partial mediation between CUC, DCP and BES through BR. This study then concluded by providing vital theoretical and practical implications for policymakers, entrepreneurs and researchers. While this study offers insight for researchers, policymakers and stakeholders in general, the author acknowledges that it is not free of limitations. For example, the small sample size applied in this research may limit the possible generalisation of the findings.
Furthermore, snowball and convenience sampling might also be criticised for not being random despite their suitability for the research. Finally, future researchers are encouraged to continue investigating the key factors behind the survival and sustainability of MSEs during challenging times, especially in developing countries. The focus on exploring external factors such as community networks, institutional support interaction with CUC, DCP and BR, and sustainability will allow further clarity on essential steps to be taken by policymakers and other involved parties in the MSE sector.
This study was conducted according to the guidelines of the Declaration of Helsinki and approved by King Faisal University.
Informed consent was obtained from all subjects involved in this study.
The data are available from the authors upon request.
The author declares that he has no conflicts of interest.
Footnotes
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Respondents’ profiles.
| Category | Key Findings |
|---|---|
| Gender | 78.2% male, 21.8% female |
| Marital Status | 53.1% single, 44.6% married, 2.3% other |
| Age | 58.1% between 21 and 30, 22.8% between 31 and 40, 13.9% younger than 20, 4.3% between 41 and 50, 1.0% over 50 |
| Education | 42.2% secondary school, 36.3% bachelor’s degree, 12.9% diploma, 7.6% primary/middle school, 1.0% higher education |
| Age of Business | 50.8% less than 5 years, 28.4% between 6 and 10 years, 12.5% more than 20 years, 8.3% between 11 and 15 years |
| Number of Employees | 84.2% have 1–4 employees, 15.8% have 5–9 employees |
| Sector | 70.0% retail and wholesale, 17.8% service sector, 12.2% small crafts and agriculture |
Source: Primary data.
Internal reliability and validity of variables.
| CA | CR | AVE | |
|---|---|---|---|
| BES | 0.857 | 0.875 | 0.702 |
| BR | 0.817 | 0.820 | 0.476 |
| CUC | 0.813 | 0.820 | 0.727 |
| DCP | 0.809 | 0.810 | 0.723 |
Source: Primary data.
Factor loadings for survey indicators.
| BES | BR | CUC | DCP | |
|---|---|---|---|---|
| BES1 | 0.879 | |||
| BES2 | 0.898 | |||
| BES3 | 0.725 | |||
| BES4 | 0.839 | |||
| BR2 | 0.689 | |||
| BR3 | 0.675 | |||
| BR4 | 0.692 | |||
| BR5 | 0.665 | |||
| BR6 | 0.719 | |||
| BR7 | 0.756 | |||
| BR8 | 0.628 | |||
| CUC1 | 0.809 | |||
| CUC2 | 0.884 | |||
| CUC3 | 0.864 | |||
| DCP1 | 0.859 | |||
| DCP2 | 0.853 | |||
| DCP3 | 0.839 |
Source: Primary data.
Discriminate validity (HTMT).
| BES | BR | CUC | |
|---|---|---|---|
| BR | 0.588 | ||
| CUC | 0.483 | 0.509 | |
| DCP | 0.490 | 0.477 | 0.539 |
Source: Primary data.
Multicollinearity test (VIF).
| BES | BR | |
|---|---|---|
| BR | 1.296 | |
| CUC | 1.364 | 1.239 |
| DCP | 1.321 | 1.239 |
Source: Primary data.
Path coefficients.
| Hypotheses | Relationship | β | T Value | p Values | Decision |
|---|---|---|---|---|---|
| H1 | CUC → BR | 0.311 | 4.892 | 0.000 | Accepted |
| H2 | CUC → BES | 0.173 | 3.047 | 0.002 | Accepted |
| H3 | CUC → BR → BES | 0.111 | 3.486 | 0.000 | Partial Mediation |
| H4 | DCP → BR | 0.251 | 3.396 | 0.001 | Accepted |
| H5 | DCP → BES | 0.198 | 3.206 | 0.001 | Accepted |
| H6 | DCP → BR → BES | 0.089 | 3.081 | 0.002 | Partial Mediation |
| H7 | BR → BES | 0.356 | 6.286 | 0.000 | Accepted |
Source: Primary data.
Correlation matrix.
| BES | BR | CUC | DCP | |
|---|---|---|---|---|
| BES | 1.000 | 0.506 | 0.410 | 0.412 |
| BR | 0.506 | 1.000 | 0.421 | 0.388 |
| CUC | 0.410 | 0.421 | 1.000 | 0.439 |
| DCP | 0.412 | 0.388 | 0.439 | 1.000 |
Source: Primary data.
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