Abstract
In this chapter, small and medium enterprises in Turkey have been analyzed in a timely manner to provide insight into their post-COVID-19 performance. The analysis starts with a snapshot of the firm structure and firm size distribution in Turkey. A brief overview of the course of the COVID-19 pandemic in Turkey has been provided. The policy responses to the economic effects of the health crisis have been discussed. SMEs' medium-term dynamics have been tabulated using the data of opening and closing firms during the first months of the pandemic. Several surveys conducted with SMEs during the pandemic by public and private organizations have been combined to match the business owners' expectations to policy responses. To assess the public response to the shock and the solutions, the stock market performance of SMEs has been compared with large firms using stock market indices of XKOBI, XPGIP, and XU100.
TopBackground
Coinciding with a strong academic environment globally, many researchers have been rallying to contribute to scientific publishing efforts on economic consequences of the pandemic concerning business enterprises. Many of them utilize quickly conducted surveys during March and April, 2020. The core importance of such surveys resides in capturing the real-time mindset of business firms (Baker et al., 2020). Fairlie (2020) closely monitored the US small businesses’ performance during the first few months of the pandemic. The findings warn against a prolonged effect of the COVID-19 related economic downturn. The loss of business in April, especially on different demographic breakdowns, is around 15 percent against pre-pandemic levels. Although there is a small rebound in May, the severity of the crisis has not improved.
Bartik et al. (2020) finds that job losses regarding small businesses in the US happened rapidly during the first few weeks.
Key Terms in this Chapter
Black Death: The deadliest pandemic of the known history, originated in the fourteenth century, killed tens of millions of people in several decades.
Medium Enterprise: Official classification of firms employing less than 250 persons in a year, and net sales revenue or a balance sheet item does not exceed 125m TRY (approx. $18m).
Micro Enterprise: Official classification of firms employing less than 10 persons in a year, and net sales revenue or balance sheet item does not exceed 3m TRY (approx. $432,000).
Branch: A subsidiary or dislocated office of an already registered firm, other than the primary business station or headquarters.
Spanish Flu: An influenza pandemic started in the last period of the First World War in 1918, lasted almost two years and killed tens of millions.
Credit Restructuring: In banking sector, re-negotiating about the interest rate and maturity of previously issued loans.
Force Majeure: A clause in contracts that lifts the parties’ obligations to each other due to inevitable and powerful events, mainly referred to as the Act of God.
Business for Goals Platform: A joint action platform to guide all willing firms towards Sustainable Development Goals in Turkey, established by Turkish Initiative and Business World Confederation (TURKONFED), Turkish Industry and Business Association (TUSIAD) and United Nations Development Programme (UNDP).
Stock Market Index: A stock market indicator summarizing the price of a specific group of firms’ stocks, e.g., industry or size group, formulated by the weighted average of the selected stocks’ market prices.
Investor Myopia: Investors’ focusing on short term consequences rather than long run possibilities.
COVID-19: Publicly known acronym for the Corona Virus Disease of 2019 caused by the Sars-Cov-2 virus.
Small Enterprise: Official classification of firms employing less than 50 persons in a year, and net sales revenue or balance sheet item does not exceed 25m TRY (approx. $3.6m).