ABSTRACT
This chapter is concerned with the effects of the economic crisis on UK SMEs and micro enterprises, the responses of firms to these effects and the implications for post-crisis recovery. The economic and financial crisis which hit the international economy in 2008–2009 presented major challenges to firms of all sizes, as well as opportunities. Compared with larger enterprises that control more substantial resources, small firms may be particularly vulnerable during periods of economic downturn and financial crisis. There are a priori reasons to expect smaller firms to be particularly vulnerable, because of a combination of resource-related constraints, low bargaining power in relation to a variety of stakeholders and a tendency to rely on bank credit on those occasions when external finance is used. In this context, the chapter seeks to assess the vulnerability hypothesis, based on an empirical study conducted in 2009.
