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COVID-19 pandemic has become a global issue causing the restriction of people and international trading and it has affected the loss of jobs and closure of firms all over the world. This paper aims to examine COVID-19 pandemic and business survival as a mediation on the performance of firms in the Fast moving consumer goods (FMCG) sector: insight for the future of business operation. Cross-sectional survey research design was adopted making use of stratified and simple random sampling technique as a guide to select participants while data analysis was subjected to exploratory factor analysis (EFA), confirmatory factor analysis (CFA) and structural equation model (SEM). The findings show that COVID-19 pandemic has affected the performance and survival of businesses in Nigeria leading to the loss of jobs, firm productivity, customer retention, increase unemployment rate, closure of businesses and GDP of Nigeria as a whole. The research has been able to provide insight on the need for full integration of technology into all the firm operational process and for the firm to remain flexible to accommodate changes as imposed on the firm’s operations through environmental uncertainties such as the pandemic. The study is the first of its kind to examine the extent of the effect that COVID-19 pandemic have had on the survival, performance of businesses and the gross domestic product (GDP) of the country since its eruption and announcement in China and has been able to provide insight by exposing most organization’s weakness especially with regard to technology-adoption and its integration into all the firm operational capabilities as is the reason why most firm struggle to meets customer needs during the lockdown. Keywords: COVID-19 pandemic, performance, survival, customer retention, Nigerian economy, GDP
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Athens Journal of Business & Economics –
Volume 8, Issue 3, July 2022 –Pages 239-260 doi=10.30958/ajbe.8-3-3
COVID-19 Pandemic and Business Survival as Mediation
on the Performance of Firms in the FMCG-Sector
By Bimbo Onaolapo Adejare*, Gbemi Oladipo Olaore±,
Ekpenyong Ekpenyong Udofia
& Oluwaseun Ademola Adenigba
COVID-19 pandemic has become a global issue causing the restriction of
people and international trading and it has affected the loss of jobs and closure
of firms all over the world. This paper aims to examine COVID-19 pandemic
and business survival as a mediation on the performance of firms in the Fast
moving consumer goods (FMCG) sector: insight for the future of business
operation. Cross-sectional survey research design was adopted making use of
stratified and simple random sampling technique as a guide to select participants
while data analysis was subjected to exploratory factor analysis (EFA), confirmatory
factor analysis (CFA) and structural equation model (SEM). The findings show that
COVID-19 pandemic has affected the performance and survival of businesses in
Nigeria leading to the loss of jobs, firm productivity, customer retention,
increase unemployment rate, closure of businesses and GDP of Nigeria as a
whole. The research has been able to provide insight on the need for full
integration of technology into all the firm operational process and for the firm
to remain flexible to accommodate changes as imposed on the firm’s operations
through environmental uncertainties such as the pandemic. The study is the first
of its kind to examine the extent of the effect that COVID-19 pandemic have had
on the survival, performance of businesses and the gross domestic product
(GDP) of the country since its eruption and announcement in China and has
been able to provide insight by exposing most organization’s weakness
especially with regard to technology-adoption and its integration into all the
firm operational capabilities as is the reason why most firm struggle to meets
customer needs during the lockdown.
Keywords: COVID-19 pandemic, performance, survival, customer retention,
Nigerian economy, GDP
The novel corona virus (COVID-19) pandemic ravaging the world sprung
from Wuhan City, China and has since spread it tentacles to over 216 countries of
the world. There are 4,125,533 global cases and 280,965 deaths as at Mid-May,
2020 (Kampf et al. 2020). However, investment in research and development on
*Doctoral Research Scholar, Department of Business Administration, School of Economics and
Management, University of Minho, Portugal.
±Researcher/PhD Scholar, Department of Business Administration, Faculty of Business, Karabuk
University, Turkey.
°Doctoral Research Scholar, Department of Business Administration, University of Lagos, Nigeria.
Research Fellow, Selinus University of Sciences and Literature, Italy.
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Adejare et al.: COVID-19 Pandemic and Business Survival as Mediation
vaccine creation to combat the effect of COVID-19 has practically reduce the
global cases to 111, 419, 939 and 2,470,772 deaths as at late August 2021 (Wang
and Tu 2020). The last pandemic that halted business activities and social
gathering was the Spanish flu. The COVID-19 pandemic brought a new way of
life, business and otherwise (Nicola et al. 2020). The major worry and cause of
anxiety in the business world as at 2019 was the trade war happening between the
United States of America and China, coupled with the move for Brexit. The
anxiety in the business world was focused on the impact the trade war and Brexit
will have on the global economy and analysts are split on the impact (Michie
2020). The International Monetary fund (IMF) also joined in the debate predicting
a moderate growth of about 3.4% of the global economy (Bentolila et al. 2019).
COVID-19 pandemic brought a disruption like no other (Ozili and Arun
2020), business environment uncertainty necessitates critical decisions for survival,
including laying off of workers, salary cuts by as high as 75%, and compulsory
leave without pay (Nadeem 2020). Global stock dipped with a stock market loss of
about USD 6 trillion within a week of the pandemic outbreak declaration, while
the United States recorded its highest unemployment rate (14.7%) since the great
economic depression era (Bernanke 2020). Nigeria is not left out of the crisis as
price of crude oil (being the major export and foreign currency earner for Nigeria)
fell. The price of crude oil as at January, 2021, was about $54.77, and highly
unstable, while Nigeria forecasted $57. The difference in price will trigger
government borrowing to cushion the effect (Ozili and Arun 2020), while the
Nigerian economic temporary shut-down had tremendous impact (Nkengasong
and Mankoula 2020). Due to the COVID-19 pandemic, businesses have had to
shut down operations, significant number of jobs were lost, low production
especially for essential firms producing consumables goods and services. This
pandemic gave rise to technology inclined firms to thrive and many employees
were forced to work from home.
Thus, as the pandemic is exposing the weakness in most countries labour
force especially Nigeria making many jobs to become obsolete and thereby
leading to joblessness, it also gave voices to technology inclined organizations and
some technological software (Zoom, meetings etc.) to became the new order of
holding and conducting business meetings, delegating task and a means to assess
employee performance and productivity since physical contact is discouraged due
the COVID-19 pandemic. This shows that as the pandemic is disrupting the usual
physical work flow and schedule, it is also indirectly preparing the mind-set of the
people especially organizations and government all over the world to adopt and
fully integrate a virtual work mode that’s capable of delivering expected result in
terms of conducting businesses, meetings and all forms of transactions and
engagements (Türker 2012, Allam and Jones 2020).
FMCG is one of the most essential sectors contributing significantly to
Nigeria’s GDP. The fast moving consumer goods (FMCG) sector are responsible
for the production of essential product and services necessary for everyday living
and this is why many government all over the world including Nigeria gave firms
in this sector special privileges to operate at a minimum capacity in order to cater
for the essential needs of their citizens during the lockdown (Barua 2020, KPMG
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July 2022
2020). In Nigeria, food, beverage and tobacco subsector of the FMCG industry
contribute up to 5% of the total GDP of the country in 2019. Furthermore, the
Nigerian stock exchange market report that FMCG sector constitute 17% of the
value of equity in its market capitalization (KPMG 2020). This shows the
significance of the sector to the Nigeria economy. While some other studies have
examined the implication of COVID-19 on the oil sector and the educational
sector in Nigeria, there’s still dearth of study on the implication of the COVID-19
pandemic, this serves as the novelty of this study as this study researched on the
impact of the pandemic in the FMCG sector vis a vis the health challenges created
by COVID-19, the uncertainty in the global business outlook, the shutdown of
businesses in Nigeria, and the looming recession which necessitated a study to
appraise the challenges posed by COVID-19 on business survival, with focus on
the FMCG sector.
Literature Review
Research show that Corona Virus (COVID-19) is from a large number of
viruses which usually cause sickness linked to common cold, severe acute
respiratory syndrome (SARS-CoV), middle east respiratory syndrome (MERS-
CoV), etc. Global cases increase daily despite measures to reduce the spread, alas,
the spread of the COVID-19 virus remains very high and astounding (Açikgöz and
Günay 2020). COVID-19 can be described as a global pandemic simultaneously
affecting all spheres, and little hope kindles bearing in mind that a vaccine is
unavailable as at late 2020 (Anderson et al. 2020). However, the first quarter of
2021 recorded many significant breakthroughs in the development of COVID-19
vaccines in countries such as USA, Russia, and UK among others (Wang and Tu
2020). There is possibility for increased individualization, less need for religious
gatherings, and governments will adopt new forms of engagement regarding
economic, social or political integration to mitigate the spread (Gössling et al.
Global Economy and COVID-19
China, the virus’s origin has over 1.4 billion population. China’s economy
was beginning to rank with the United States before the outbreak of the pandemic;
clocking $13.7 trillion as gross domestic product (GDP). China started battling
with the outbreak of the virus around December, 2019, leading to shut down of
almost all activities as demand and supply also plummet; affecting the Chinese
economy in the first quarter of 2020 and spilled over to other economies (Açikgöz
and Günay 2020). The global economy has been projected to fall by 2.4% in 2020
due to the outbreak of the pandemic, while some experts predict worse (1.5%)
come first quarter of 2021 (Barua 2020).
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China shut-down meant 20.2% of world’s total crude oil became redundant.
In addition, oil price war between Saudi Arabia and Russia adversely affected oil
price (Michie 2020). International Labour Organization (ILO) projected 5.3
million to 24.7 million job loss due to the pandemic, tethered to revenue loss
(between $860 billion to $3.4 trillion) by December, 2020. Such revenue loss can
trigger global financial crisis and recession (Bloomberg 2020b). The global stock
market price is falling sharply over the uncertainty in the global economy as the
FTSE, Nikkei, Dow Jones have all witnessed share price fall since the beginning
of the COVID-19 pandemic (Anderson et al. 2020). The United States had to
inject $2.2 trillion into the economy to save the vulnerable citizens, the United
Kingdom did likewise by paying up to 80% of employees’ wages to prevent
massive layoffs, bankruptcy, and economic meltdown. The major problem is
experts predict an economic recession after the pandemic (Bernanke 2020).
FMCG Sector and COVID-19 Pandemic in Nigeria
The outbreak of the COVID 19 pandemic brought unprecedented challenges
to the FCMG sector in Nigeria. The COVID 19 pandemic lead to drastic fall in the
demand for goods and services by consumers while some manufacturers had to
shut down completely in order to obey government regulations and to prevent
spread of the virus among their workforce (Adesoji and Simplice 2020, National
Bureau of Statistics 2020b). While safety measures are being embraced and
COVID 19 strictly being adhered to by firms in the FMCG sector in Nigeria, this
makes it impossible for them to attain full production as it was before the
pandemic outbreak and after some months of partial operations, most of the firms
in the FMCG sector in Nigeria had to fully shutdown their production operations
(KPMG 2020). Few firms in the sector tried to rise to the occasion by seeking
innovative means of dealing with the situation but it was a situation not foreseen
and most of these firms in the FMCG sector in Nigeria end up incurring more cost
than usual leading to more disruptions in production. The restrictions imposed on
Nigeria’s border trade by the Federal Government of Nigeria due to the pandemic
outbreak also significantly disrupted supply chain for the FMCG sector starving
them some components of raw materials needed for continued production and
placing them also at the verge of losing some already acquired materials for
production due to material expiry and inability to continue production activities
(National Bureau of Statistics 2020a). Some states in Nigeria like Lagos state and
Ogun state which are the major hubs used by FMCG firms for production were
also in total shutdown as directed by the government due to the COVID 19
pandemic outbreak, this total shutdown further acted a bigger impediment for
production thereby forcing production in the sector close to a near zero margin
(KPMG 2020). The FMCG sector is projected to contribute 5% of Nigeria’s GDP
before the COVID 19 pandemic outbreak and the question remains if the FMCG
sector in Nigeria will still be able to contribute this percentage to Nigeria’s GDP
post COVID 19 or if the sector itself will be able to bounce back from the present
near zero production and operation.
Athens Journal of Business & Economics
July 2022
COVID-19 and the Nigeria Economy
The outbreak of the COVID-19 pandemic disrupted economic and business
activities in Nigeria like most other parts of the world; The Nigeria government in
recent time has not experienced such pandemic and also did not have any
preparations in place to cushion the effect of the COVID-19 pandemic. Nigeria’s
economy high dependence on imports especially imports from China aggravated
Nigeria’s economy vulnerability as imports and raw material imports from China
into Nigeria’s economy constitutes about 70%. Also, Asia and Europe combined
contributed about 86% of Nigeria’s import indicating that the restrictions imposed
across Asia and Europe on cross border trades has distorted supply chains to
Nigeria and starving the Nigeria economy the needed raw material input for
production (National Bureau of Statistics 2020c). The total lockdown order and
travel restrictions from various parts of the world limited Nigeria’s economy
access to raw materials and also prevented export of goods and services from
Nigeria’s economy to other economies of the world which in turn starved the
Nigeria economy from earning foreign exchange that could have help further to
boost the economy. The global oil price also went from over $62 to as low as $23
due to the outbreak of the COVID-19 pandemic; this had a devastating effect on
Nigeria’s economy because Nigeria economy is majorly dependent on crude oil
export and Nigeria mostly earn her major foreign exchange from oil export
(Bloomberg 2020b, Ozili and Arun 2020).
The Nigeria Federal Government also had to embark on some strict measures
necessitating cutting of spending and expenditure while putting available resources
into managing the health pandemic brought about by COVID 19, though the move
by the Federal Government of Nigeria was logical bearing the serious need to
curtail the COVID-19 virus but the move also lead to other aspect of the economy
been starved of needed fund (Adesoji and Simplice 2020). The Nigeria economy is
also expected to experience one of its deepest recession since 1980s due majorly to
the COVID-19 pandemic outbreak and the disruptions caused by the COVID-19
pandemic. The Nigeria economy has witnessed disruptions leading to lower oil
prices and remittances, enhanced risk aversion in global and local markets; the
Nigeria economy is also projected to contract around 4% due to the COVID-19
pandemic (World Bank 2020b). While the Federal Government of Nigeria is still
working on how to revive the economy, it’s still very uncertain how long the
recovery of the Nigeria economy will take and if the current effort of the Nigeria
government will yield the desired result.
Underpinning Theory
Profit Maximization Theory and Survival-Base Theory
Profit maximization theory was propounded by Adam Smith and was first
used in his publication titled the wealth of nations, stating every business will act
in self interest in order to maximize profit from their business engagements. While
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the Survival-based theory was originally developed by Herbert Spencer (Miesing
and Preble 1985), the theory was very popular in the 19th and 20th century and the
theory places emphasis on survival of the fittest as every business organization
will put every available strategy in place to ensure survival. The theory of profit
maximization argues that every business owner or organization will act in self-
interest at every point in time in order to maximize profit, ensure longevity and to
increase aggregate benefit derived by the society (Lynch et al. 2000, Jafar et al.
2010). The theory also assumed an economic perspective reiterating that organizations
seek to maximize profit by equating marginal revenue to its marginal cost. The theory
further stated that profit maximization is the ultimate goal of the organization as
long as law and ethical custom are followed in the conduct of the organization’s
business activities (McAleer 2003).
While Survival-Based theory on the other hand based its arguments on the
survival of the fittest and explains that organizations must do everything legally
possible to thrive, compete and survive (Dwyer et al. 2003). Survival-Based theory
emphasizes that it’s normal for competitors to put in efforts to produce the fittest
organization that adapts easily and is efficient. The theory assumes ruthless
business rivalry supports the goal, which is legitimate survival (Lantos 2001). The
application of the theory in the corporate turnaround of businesses is relevant till
date, as ailing organizations usually face financial difficulties, loss of personnel,
failing products, loss of market share, etc. An organisational resurgence may require
reduction/layoff of its employees, cutting of salaries, selling of the organization’s
under-capacity asset, repositioning their product to aid survival (Gössling et al.
2016). The primary aim of organizations is efficiency, flexibility, and profitability;
these ensure survival (Coad et al. 2013). All measures adopted by firms, especially
post COVID-19 outbreak supports these theories (profit-maximization and
survival), hence, they are relevant.
Conceptual Framework and Hypotheses Development
Figure 1. COVID-19 and Factors under Consideration
Independent Mediation
H1 H3
Source: Researchers’ (2020) as advanced by literature.
Unemployment /
Job Loss
Firm Technology
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July 2022
COVID-19 and Business Survival/Customer Retention
The COVID-19 pandemic has affected businesses as well as the stock market
in Nigeria. The Nigerian stock market lost about NGN2.3 trillion (US$5.9 billion)
with possibility of further loss (Ozili and Arun 2020). Nigerian businesses were
lost due to low patronage and sustained supply disruption (Nseobot et al. 2020).
Retaining customers is more difficult as orders from customers are at its lowest. A
lot of experts and economic analysts have predicted a very glooming picture
regarding business survival in Nigeria and the study done by (Ozili and Arun
2020) looks at COVID-19 and economic crisis, but the study did not look at the
effect on businesses survival neither was the study domesticated within the Fast-
Moving Consumer Goods (FMCG) sector in Nigeria. This necessitated the
formulation of hypotheses one and two to see if COVID-19 has affected the
possibility of business survival and customer retention within the FMCG sector.
Ho1: COVID-19 pandemic affect business survival in the FMCG sector
Ho2: COVID-19 pandemic through business survival have indirect impact on customer
retention in the FMCG sector
COVID-19 and Firm Productivity/Business Survival
The FMCG industry in Nigeria has faced series of challenges overtime. The
decline in consumer purchasing power due to the 2016 recession in Nigeria is an
example. The FMCG industry was one of the major hit industries by COVID-19,
compounded by Dollar inaccessibility and weak macroeconomic conditions
(Ogunlela and Lekhanya 2016). Among the challenge faced by firms in the FMCG
sector is the issue of disruption in all facets of the firm causing many firms to lay
off staff or enforce a compulsory leave without pay (Nseobot et al. 2020). The
pandemic’s effect on firm’s productivity in the FMCG industry is evident in
production rate, indirectly affecting their market share. Some research has focused
attention on COVID-19 and how it has affected some selected industry and
general outlook of events in Nigeria (Teriba 2020, Açikgöz and Günay 2020), but
none of the research is yet to really domesticate the study within the FMCG
industry, a gap this study intends to fill. Hypothesis three examines business
survival and firm productivity in the FMCG industry, and the effect of COVID-19.
Ho3: COVID-19 pandemic through business survival have indirect impact on firm
loss of productivity in the FMCG sector
COVID-19 and Unemployment/Business Survival in the FMCG Sector
Unemployment is a major problem, especially in Nigeria and Africa as a whole.
The government and private sector in Nigeria collaborate to tackle unemployment
and create opportunities for the working age bracket. Unemployment can lead to
increase in poverty, and the COVID-19 pandemic is already showing signs that the
gain made fighting unemployment maybe undone (Akanle and Omotayo 2020).
The study done by Adu et al. (2019) assessed unemployment situation at some
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selected industries in Nigeria, but the study did not include the FMCG sector. This
informed the formulation of hypothesis four to x-ray the unemployment situation
that maybe increased within the FMCG sector in Nigeria due to the COVID-19
Ho4: COVID-19 pandemic through business survival have indirect impact on
unemployment/job loss in the FMCG sector
COVID-19 and Technology Adoption/Business Survival
The outbreak of the novel COVID-19 virus was unexpected. It necessitated a
halt to most activities and a need to adopt other forms of engaging remotely to
sustain economic activities to avoid total shut-down (Ting et al. 2020). COVID-19
forced information technology (IT) adoption for many firms and government
establishments (Allam and Jones 2020). Adoption of technology became a must,
increasing operational cost. Share value of online video platforms like Zoom,
Microsoft teams, Skype etc., increased (Ting et al. 2020). Did COVID-19 force IT
adoption across firm value chain or was it just a mere coincidence? Hypothesis
five looks at COVID-19, technology adoption and business survival.
Ho5: COVID-19 pandemic through business survival have indirect impact on firm
level of technology adoption in the FMCG sector
COVID-19 and the Nigeria Economy Outlook
Nigeria witnessed an economic crisis in 2009 caused by the global financial
crisis, and 2016 caused by the sudden fall in the international oil price. Currently,
the COVID-19 pandemic has affected price of crude oil, the major foreign
currency earner for Nigeria. The difference in price of crude oil is already showing
a major trouble for the Nigerian economy (Ozili and Arun 2020). Besides
inadequate funds to support budget, business closure leads to a fall in taxes and
income accruable to government (Nkengasong and Mankoula 2020). The study
done by Nseobot et al. (2020) looks at the aftermath for businesses in Nigeria but
did not highlight the effect of COVID-19 on Nigeria’s economy and lessons from
it. Hypothesis six investigates COVID-19 and Nigeria’s economic outlook.
Ho6: COVID-19 pandemic contribute negatively to Nigeria’s economy outlook
The study is descriptive in nature because it employs both primary and
secondary methods to gather the needed data to test hypotheses. Hypotheses one to
five used responses from survey data, while hypothesis six used data from
National Bureau of Statistics (NBS) and Central Bank of Nigeria (CBN) to
examine the effect of COVID-19 pandemic on Nigeria economy. The study
sample- size consists of twenty FMCG firms from among the total population of
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35 recognised FMCG firms by Nigerian Stock Exchange (NSE). The justification
for selecting 20 firms from the list of 35 recognised FMCG firms in Nigeria is to
have a representative whole from among the list of recognised FMCG firms.
Simple random and stratified sampling techniques were employed to select forty
senior employees in each of the selected FMCG firm, making a total of eight-
hundred senior employees selected for sampling. Due to the COVID-19 pandemic
that is restricting movement and causing social distancing, the questionnaire items
were created in a google form and sent to the respondents (So et al. 2014). The
data collation took up to four month (September to December 2020) for
distribution and collation of data for this study. The justification for selecting
senior level employees at each FMCG firms is to be able to assess the deep effects
of the COVID-19 pandemic on business survival in Nigeria.
Questionnaire items were adapted from literature; customer retention
(Gustafsson et al. 2005), firm productivity (Buuri 2015, Leitão et al. 2019),
unemployment (Arnout 2019), technology adoption (Ratchford and Barnhart
2012, Türker 2012), while questions on COVID-19 were adapted from (Caldera
and Wirasinghe 2014, Udofia et al. 2020). To access the homogeneity and data
adequacy before testing hypotheses using structural equation model (SEM), the
exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were
employed. The study assessed the general reliability of the instrument by
conducting a pilot study of one hundred respondents selected across ten FMCG
firms and the result revealed 0.87 which is above the recommended threshold
(Nunnaly 1978). The justification for using SEM is the need of the study to test the
causal relationship existing between measured, observed and latent variable in the
study. Within the four month duration of the data collection, only six-hundred and
seventy return rate was achieved (83.8% return rate) and was used for the analysis.
Table 1. Measurement Items
My country experienced positive tests of the novel COVID-19 virus
Udofia et al. (2020)
My country has never experienced a pandemic of this magnitude
Udofia et al. (2020)
The virus has disrupted my company supply chains services
Udofia et al. (2020)
COV4 The COVID-19 virus is present in all parts of the country
Caldera and Wirasinghe
COVID-19 virus has made a serious impact to the way we conduct
Caldera and Wirasinghe
Firm Technology Adoption (FTA)
We have fully embraced technology adoption into all the company
value chain
rker (2012)
The pandemic led to wide spread automation of performance and
service delivery
Ratchford and Barnhart
I find it difficult to deliver effectively using technology
rker (2012)
The overall performance of the company was affected due to
working from home policy
rker (2012)
SD5 I am more productive using technology to deliver work from home
Ratchford and Barnhart
Business Survival (BS)
The company is facing a high financial challenge due to the
Bates (1995)
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There is significant reduction in the production of goods and
services due to the pandemic
Singh (2017)
We have recorded low sales and return as a results of low
production in the past few months
Korunka et al. (2011)
We have had to lay off staffs to cushion the effects of the pandemic
Singh (2017)
We have had to reduce employees work hours per day to cushion
salaries and or wages payment
Bates (1995)
Customer Retention (CR)
We have remain consistent in retaining both new and current
Gustafsson et al. (2005)
Technology gives us the leverage we need to provide unwavering
service needs to our consumers
Gustafsson et al. (2005)
Our effective online engagement has brought in more customers for
Vasic et al. (2019)
We struggle to retain customers during the pandemic
Chavez et al. (2016)
CS5 Our products and service demands skyrocketed during the
lockdown Vasic et al. (2019)
Unemployment (U)
The pandemic significantly reduced hours of jobs available
Furnham (1982)
There is a mismatched between contemporary market needs and
employees skill set
Furnham and Hesketh
Inability of unemployed people to adapt to new working conditions
Feather (1990)
ORP4 There are lack of intelligence and ability among unemployed people
Furnham and Hesketh,
Work from home strategy exposed many employees deficiency with
regards to technology usage in the organization
Furnham (1982)
There is a huge gap between the current job market realities and the
educational system
Furnham and Hesketh,
Low production capabilities result into loss of job opportunities
Feather (1990)
Data Analysis
Table 2. Demographics of the Respondents
Valid Percent
Cumulative %
Salary Range
Less than 5million per Annum
15million & Above
Production/ Supply chain
Marketing & Sales
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July 2022
Assessing Multivariate Analysis Assumptions
In conducting structural equation model (SEM), assumptions of sample-size,
normality, missing-values and multicollinearity were tested (Kline 2005). The
recommended 200 sample size (Iacobucci 2010) was met given that the sample
size used for this study is six hundred and seventy (670). To address normality,
questionnaire items were assessed for skewness and kurtosis and the results were
within the threshold of -1 to +1 (Amin et al. 2014). Frequency count revealed
neither outlier nor missing values in the data set (Yana 2007). Multicollinearity
was tested by correlation analysis. Correlation value above 0.5 is good (Field
2005), correlation for all the variable was above 0.5. Furthermore, we examine
common method bias by looking at the second approach of Harman which is a
more comprehensive and rigorous-technique (Podsakoff et al. 2003 and 2012)
using CFA method. This was achieved by loading all twenty-five items used in the
study into a single-factor using CFA. The result shows a poor fit as (chi-
square=21.347, IFI=0.62, CFI=0.42, TLI=0.63, NFI=0.61, and RMSEA=0.24).
Hence, the common method bias rule was not violated in this study.
Principal axis-factoring using EFA reduced redundant items and examined
constructs loadings. Homogeneity was tested via KaiserMeyerOlkin (KMO)
and the Bartlett’s-test of sphericity (BTS), recommended values of acceptance are
0.05 and 0.000 respectively (Orçan and Yang 2016). The KMO results from the
EFA analysis is 0.828 and Bartlett’s-test of sphericity (BTS) is (χ2=28155.593,
p=0.000, and <0.05). Homogeneity and data adequacy were achieved.
Table 3. Measurement Model
Items Constructs CFI R2 Mean SD
Adoption 0.911
0.763 0.711 0.656
Pandemic 0.924
0.752 0.738 0.545
0.833 0.728 0.603
nt 0.915
0.810 0.721 0.745
Productivity 0.912
0.833 0.803 0.632
Retention 0.905
0.810 0.710 0.650
Note: CR: Composite Reliability, AVE: Average Variance Extracted, CFI: Comparative fit indices, χ2: Chi-square Value.
Source: Field Survey, 2020.
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A unidimensionality analysis was conducted to assess the fitness of the model
for conducting SEM and the measures was assessed through composite reliability
(CR), average variance extracted (AVE), Cronbach alpha, factor-loading, mean
and standard deviation. The reliability of the construct was assessed using
Cronbach-Alpha reliability technique and the results was above 0.70 as
recommended by Nunally (1978) (see Table 1). The factor loadings for each of the
twenty-one items have values greater than 0.5 as shown (see Table 1), hence, the
data loaded very well and shows a good fit for the measurement model.
Comparative fit index (CFI) is used to assess whether the study model
compare with the null-model supposing there are no correlations between the
models constructs. As shown in (Table 2) the CFI value for all the constructs is
greater than 0.90 and therefore shows a good fit for the measurement model
(Bagozzi and Yi 2012). Hence, the CFI value shows acceptable model fitness.
Composite Reliability is used to check the internal consistency of each constructs
with regard to the variance from an observed variable from their latent factor. A
composite reliability that is ≥ 0.70 has internal consistency, Table 1 shows all five
constructs had consistency via higher values. AVE is the extent of the variance
captured by a construct from the total amount of measurement error experience in
a model. Maravelakis (2019) puts the threshold at 0.50, and Table 1 shows non-
violation. Hence, homogeneity was achieved for the model used to test the
hypotheses stated in the study through SEM. Thirty-one items were subjected to
CFA and only twenty-five items were deemed fit. Customer retention, business
survival, firm productivity, and COVID-19 pandemic had (CR5), (BS2, BS4),
(FP3) and (COV3, COV5) deleted respectively.
Table 4. Results of CFA
2.328 290 0.000 0.915 903 0.920 0.911 0.06
≤ 2 or 3
>0.9 >0.9 >0.9 >0.9 < 0.08
The model fit generally shows the comparative fit index (CFI=0.915), tucker
lewis index (TLI=0.903), incremental fit index (IFI= 0.920), goodness of fit index
(GFI=0.911), chi-square (X2=2.328), degree of freedom (Df=290) and root mean
square error of approximation (RMSEA=0.06), all of which shows that the model
is above the recommended threshold for acceptance and is therefore fit to test the
stated hypotheses see Table 2 (Nusair and Hua 2010, Hair et al. 2017).
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July 2022
Hypotheses Testing
Table 5. Path Model
Hypothesized Model
0.18 (DE)
positive and direct effect
0.56 (IE)
positive and indirect effect
0.54 (IE)
positive and indirect effect
-0.30 (IE)
negative and indirect effect
0.26 (IE)
positive and indirect effect
P<0.05; Where: DE=Direct Effect, IE=Indirect Effect, BS=Business Survival, FTA=Firm Technology,
FP=Firm productivity, U=Unemployment, CR=Customer Retention, COV=COVID-19 Pandemic.
Six hypotheses were examined; however, the first five hypotheses were
analysed using SEM and the direct, indirect, and standardized regression weights
are shown in Figure 2. The sixth hypothesis was analyzed using a narrative
discourse that compare the third and fourth quarter of 2019 to the first and second
quarter of 2020 using secondary data that was derived from NBS and CBN in
order to examine the impact of COVID-19 pandemic on the Nigerian economy
outlook. The result from the SEM analysis shows that (H1) there is a direct
relationship between COVID-19 pandemic and FMCG firms’ performance (t-
value=3.679 at p=0.005), therefore, the hypothesis was accepted. This means that
the sudden occurrence of COVID-19 pandemic have adverse impact on business
continuity and survival in the FMCG sector. The indirect hypotheses (H2 to H5)
examine the survival of businesses in the FMCG sector as a result of the impact of
COVID-19 pandemic using firm performance measures such as firm productivity,
unemployment, customer retention and firm technology adoption. The result
shows that COVID-19 pandemic have indirect impact on all the performance
measures used in the study and therefore, affect the operations of many
organizations in the FMCG industry thereby determining the survival and or
failure of this firms.
Although, the analysis shows a positive and indirect effect of COVID-19
pandemic on firm productivity, unemployment and firm technology adoption as
the significant (t-value=11.919, 14.075 and 6.274 at p=0.05), making these
hypotheses accepted. Hypothesis (H2) that examined the COVID-19 pandemic on
customer retention and business survival of FMCGs show a negative, indirect, and
significant effect (t-value=-6.946 at p=0.05). The significant impact therefore,
make H2 to be accepted. The negative relationship could be as a result of the
lockdown which make it difficult for organization and customers to have a
consistent transactional relationship among each other’s thereby forcing customers
to look for alternative firms whose online presence is strong and can immediately
satisfy theirs needs during the lockdown.
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Adejare et al.: COVID-19 Pandemic and Business Survival as Mediation
Figure 2. Standardized Hypothesized Structural Equation Model
Ho6: COVID-19 pandemic negatively impact Nigeria’s economy outlook
The Nigerian economy outlook can be measured by the gross domestic
product, inflation rate and interest rate (Bello and Aliyu 2016). However, the study
used the GDP and inflation rate to measure the Nigerian economic outlook in
order to assess the impact of COVID-19 pandemic on the Nigerian economy when
compared to the preceding year 2019. This would highlight the extent of damage
the pandemic has caused on the Nigerian economy and would ascertain the
acceptance or rejection of H6.
Table 6. Nigerian Economy Outlook 2019 and 2020
2019 (%)
2020 (%)
(Quarter 1)
(Quarter 1)
(Quarter 2)
(Quarter 2)
(Quarter 3)
(Quarter 3)
(Quarter 4)
(Quarter 4)
Source: National Bureau of Statistics (2020).
The Nigerian GDP grew by 1.87% in the first quarter of 2020, this represents
a decline when compared to the growth of 2.55% of 2019 4th quarter. The decline
Athens Journal of Business & Economics
July 2022
in GDP in 2020’s 1st Quarter could be trace to halted international trading
(National Bureau of Statistics 2020c, Adesoji and Simplice 2020). Similarly, the
GDP in the second quarter experience a -6.10% decline as against the growth
experienced in the preceding quarters. The third quarter also experienced a decline
of 3.62% as against the preceding quarter. However, the fourth quarter shows a
relief growth in the GDP with 0.11% and overall, put the GDP annual growth rate
to a decline of 1.92 as against the preceding year. Hence, this decline shows the
damage COVID-19 has had generally on the economic outlook of Nigeria.
Additionally, the Nigerian inflation rate shows that it has been increasing at an
alarming rate from the last five month of 2019 through to the last five month of
2020. Although, the trend of these increase is consistent from the beginning of
2019 and therefore, cannot be categorically stated that the continuous increase in
the year 2020 is as a result of the COVID-19 pandemic. However, given the
annual decline in the GDP of Nigerian in 2020 (-1.92) amidst the global pandemic
compare to the annual increase (2.27) experienced in 2019; then we can state that
COVID-19 pandemic impact negatively the Nigerian economic outlook, thereby
leading to the acceptance of the hypothesis.
Discussion of Findings
The study examined COVID-19 pandemic, business survival and FMCG firms’
performance. Six hypotheses were examined, five hypotheses were analysed using
SEM and the sixth hypothesis was analyzed using a narrative discourse. Among
the five hypotheses (one direct and four indirect) examined with SEM; all the five
hypotheses were supported. The study revealed that COVID-19 pandemic affected
business survival in the FMCG industry due to compulsory lockdown by Nigerian
government. This affirmed Bloomberg (2020a) report that businesses who are
forced to lockdown face liquidation and survival challenge all over the world.
Furthermore, findings revealed that COVID-19 pandemic exposed the level of
firm technology usage and their survival in the FMCG industry. This aligns with
survival-based theory and profit maximization as any firm who could not produce
at optimum capacity nor maximize profit risk the chance of surviving and thriving.
The 21st century business environment of today is currently working at a pace
where firm can hardly get anything done without full integration of technology
into its operations. This is the reason why many firms struggle to meets customer
needs online while other competitor leverage technology to meets existing and
new customers’ needs using technology (Mutlu et al. 2015). It is evident that many
FMCG firms had minimal technology adoption across its value chain as revealed
by the finding. Hence, firms need to comprehensively integrate IT into its value
chain to mitigate uncertainties that could adversely affect performance (Mutlu et
al. 2015) as this is seen as one of the contribution to knowledge for this study.
Findings also revealed that the COVID-19 pandemic affect unemployment
rate and or loss of job thereby affecting business survival in the FMCG industry.
This finding aligned with reports by (International Labour Organization 2020,
World Bank 2020a, Nkengasong and Mankoula 2020) that COVID-19 pandemic
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Adejare et al.: COVID-19 Pandemic and Business Survival as Mediation
affect the unemployment rate in many countries leading to the loss of jobs and
income. The findings support the theory of profit maximization and survival-based
as all organization are looking for the most effective ways to maximize profit, and
hence, would do everything legally possible to keep the organization in operations.
Since the finding of the study shows that COVID-19 pandemic affect business
survival in the FMCG industry, it translates into more unemployment in the
country (International Labour Organization 2020).
Furthermore, finding shows that COVID-19 pandemic affect firm’s productivity
and business survival in the FMCG industry. Firms had to reduce their manpower
and production schedule especially those regarded as essential product producers,
complicating optimal performance. This effect on firm productivity will affect
customer needs, supply, firm revenue and profitability (World Bank 2020b,
Nkengasong and Mankoula 2020). This finding also aligned with the submission
of profit maximization and survival-based theory as profit and survival can only be
achieved when organization produce at optimum capacity, otherwise, firms would
look for every means possible to remain in business even if it means drastic
manpower reduction.
Findings of the study show that COVID-19 pandemic has a significant
negative indirect effect on customer retention and business survival. Developed
nations contributes to citizens welfare during the lockdown by providing basic
households needs in order to curtail the spread of COVID-19 pandemic and
restrict the urge of citizens wanting to go out of their house (Nkengasong and
Mankoula 2020, Açikgöz and Günay 2020). However, this is not the case in
Nigeria as many citizens are left stranded without any provision for basic
household’s needs thereby making citizens to source for basic needs; hence,
risking contact, exposure and the spread of COVID-19 pandemic. Thus, less
physical and more virtual interface/engagement with customers must be
implemented by firms to satisfy customers regardless of location (Mutlu et al.
Finally, finding showed that COVID-19 pandemic negatively affect the
annual GDP of Nigeria’s making the economy outlook to experience (-1.92%)
decline as against the preceding year. This is not surprising given the halt to
international trading and lockdown experienced by businesses across the country.
COVID-19 pandemic affected 60% of the global-oil-prices and given the reliance
of the country economy on oil revenue, then it is certain that the GDP will be
adversely affected (National Bureau of Statistics 2020c). Also, the finding shows
that as the country GDP is experiencing decline, inflation rate is also increasing at
an alarming rate making the country currency to experience a major setback in
valuation when compared to foreign currency such as dollar ($) (Nkengasong and
Mankoula 2020, Nseobot et al. 2020).
COVID-19 pandemic brought a new normal to business operations all over
the world and especially FMCG firms and has been able to expose organizations
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July 2022
directly and indirectly to their various weaknesses with regards to their operational
flexibility, technology adoption and readiness to accept change as imposed by both
internal and external pressures in the business environment (Michie 2020,
Nkengasong and Mankoula 2020). The current business environment is dynamic
and multifaceted, elevating uncertainty. Thus, IT integration to value chain
operations is pivotal to customer satisfaction, retention and business survival.
Furthermore, the study revealed that COVID-19 pandemic affected jobs, firm
productivity, and unemployment rate in Nigeria (and the world). Though, many
countries and especially developed ones are supporting corporations to cushion the
effect of COVID-19 pandemic. Hence, the government needs to also support
FMCG firms in Nigeria to survive the effect of COVID-19 pandemic in order to
manage job loss (Gössling et al. 2020). The study found a negative indirect
relationship through COVID-19 pandemic and customer retention and business
survival in the FMCG industry. COVID-19 pandemic exposed the weakness of
many firms to re-assessing the level at which they can remotely attend to customer
needs and keep customer engaged in the organization using technology. The world
is changing so fast and this has made many firms to move from traditional means
of engaging customers to digital means (Dadzie et al. 2017). Thus, firms who are
able to survive the pandemic have to fully adopt digital content marketing
communication strategy and fully integrate technology into firm value chains in
order to keep firm customers engaged, satisfied and retained (Dadzie et al. 2017,
Mutlu et al. 2015).
Furthermore, FMCG firms in Nigeria may also need to adopt pay per hours of
work rather than monthly salary (9am to 7pm of work) as is the usual practice
FMCG firms and other industry. This would enable firms to reduce the number of
hours that all employees can work in a day in order to give opportunity to
everyone thereby reducing the unemployment and hardship situation in the
country especially as the pandemic as worsened for everyone (Açikgöz and Günay
2020, Allam and Jones 2020). Finally, finding also shows that COVID-19
pandemic has adverse effect on the Nigerian economy outlook considering the
decline in GDP and continuous increase in the country’s inflation rate. This has
triggered continuous borrowing from other country in order to survive and avoid
incessant recession, hardship and unemployment as worsened by the COVID-19
pandemic (Michie 2020).
COVID-19 has become a global phenomenon ravaging the entire globe and
also a serious concern to various Businesses, Government and individuals at various
levels. This paper examines the COVID-19 pandemic and business survival as a
mediation on the performance of FMCG firms. Plus, the general economic outlook
in the face of the COVID-19 pandemic. The study showed that there is a direct
impact between COVID-19 pandemic and survival of businesses, firm productivity,
unemployment, customer retention and firm technology adoption in the FMCG
industry. Findings also show a drop in the growth of the Nigeria GDP when
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Adejare et al.: COVID-19 Pandemic and Business Survival as Mediation
examining the Nigeria economic outlook through the pandemic. This is as a result
of halt in local production, international trading due to the compulsory lockdown
of the economy to mitigate the impact and spread of the pandemic, although,
major breakthrough has been recorded in the creation of vaccines across countries
(UK, USA and Russia, among others) to mitigate the further spread of this virus
and if possible to eradicate its existence across countries (Wang and Tu 2020,
Liang and Litscher 2020). However, this study emphasise a serious need for
workable policy frameworks and economic reforms by the Nigerian government
to ensure the economy is revived and set on the path of growth and development
towards reducing unemployment and the burden of job-loss. They also need to
create avenue for businesses to thrive/survive in the country and create a means to
prevent total economic collapse due to the COVID-19 pandemic especially in the
FMCG sector.
Suggestions for Further Research
The study examined COVID-19 pandemic and business survival as a mediation
on performance of FMCG firms. The study was able to recover only six hundred
and seventy employee responses from the selected FMCG firms. Further research
can be done on the same subject with a larger sample size. Also, the study focuses
specifically on the impact of COVID-19 pandemic on the survival of FMCG
firms, further research can extend to other industries to establish a holistic view of
the effect of COVID-19 pandemic on the Nigerian economy and provide further
insight to the future of business operations. Further research can also be done to
look at a comparative impact of COVID-19 pandemic on business survival and
performance in develop and developing economies. The findings would serve as
guide to government especially in developing economies about the importance of
supporting firms and building a sustainable and conducive business environment.
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... Prior studies related to this study have revealed that Covid-19 led to bankruptcy, loan repayment defaults and the closure of many companies and businesses (Menon, 2021). Employees experienced salary cuts during this period, some were even laid off and some were even given compulsory and terminal leave without pay (Adejare et al. 2021). However, no one knows the extent of the havoc, but quick responsive and corrective action is highly necessary from companies and governments, which could reduce the impact on both the immediate and future performance and sustainability of companies. ...
... Companies need modern-day technological software and must be well digitalised to make them leaders in their industries. Many companies ceased because after various governments introduced total lockdowns, at least for the first six months they could not cope with the situation, especially SMEs (Adejare et al. 2021;Queiroz et al. 2020). Small companies should also look for mini software packages that will be suitable for the size of their companies to remain in business (Meramveliotakis and Manioudis, 2021;Pu et al. 2021;Menon, 2021). ...
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The study examined the sensitivity analysis of the impact of Covid-19 on Corporate Sustainability and Company Performance of South African listed companies. The study employed secondary data retrieved from the annual reports of the selected companies. Stakeholder Theory and the Traditional Theory of Economics and Finance from the theoretical foundation of this study. Data retrieved from 40 companies for the period 2010 -2021 was analyzed using panel fully modified ordinary least squares (FMOLS) and dynamic ordinary least square (DOLS) methods, representing all sectors with the help of a convenience sampling method. Findings revealed a strong relationship between corporate sustainability performance and company performance with other explanatory variables. This study also implied that the impact of the Covid-19 pandemic was so sensitive on South African companies and companies must pay strong attention to recovery strategies suggested to reduce the severity of the impact on them and ensure a quick recovery.
The global recession due to the pandemic has knocked the business landscape and brought the world to its knees. There were a number of renowned companies that made the headlines for being the top industry hard hits. Nonetheless, there were businesses that survived this pandemic and navigated the COVID complexities so effectively that it tipped the scales in their favor. We attempt to study the factors that helped these businesses masterfully work their way through the conundrums of coronavirus pandemic. We first build a dataset that entailed information pertinent to businesses and relevant COVID-related information that was sourced from Yelp and other platforms. We used a variety of classifiers to make predictions about the survival of these businesses followed by that after assessing their performance through varied methods. The model efficiency was classified based on several rating techniques to evaluate both underperforming and profitable businesses.
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Pandemi sürecinde yüz-yüze etkileşimlerin terk edilmesi gerekliliği, Metaverse teknolojisine olan ilginin artmasına neden olmuştur. Metaverse’ün, bu gereklilik neticesinde örgütsel hayata dâhil olan hibrit çalışma sistemi için vazgeçilmez bir kolaylaştırıcı olacağı düşünülmektedir. Alışılagelmiş çalışma sistemlerini sanal dünyaya taşımaya imkân tanıyan bu teknolojinin örgüte sağlayabileceği faydalar konuşulurken, örgüt çalışanlarını birbirine bağlayan örgüt kültürünün oluşumu, gelişimi, aktarımı ve devamlılığının sağlanması hususunda nasıl bir etkisi olacağı ise henüz cevabı belli olmayan bir sorudur. Üstelik Metaverse’ün kültürel çeşitliliğin azalmasına neden olacağına dair dile getirilen endişeler göz önünde bulundurulduğunda bu soru çok daha hayati bir öneme sahip olmaktadır. Günümüzde konuşulan bu sorular ekseninde bu çalışmada, örgütlerin iş yapma şekillerini kökten değiştirmeye aday olan Metaverse teknolojisinin, örgüt kültürü üzerinde gerçekleştirmesi muhtemel olan etkilerinin irdelenmesi amaçlanmaktadır. Bu etkilerin saptanabilmesi için geniş bir yazın taraması yapılmıştır. Yapılan yazın taraması sonucunda Metaverse’ün örgüte ait bir kültürün oluşturulması ve sürdürülmesinde nasıl ve ne şekilde bir rol üstlenebileceğine dair tespitlerde bulunulmaya çalışılmıştır.
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This paper is an introduction to the book publication “Essays on COVID-19 Research” and presents a survey of thirty-one selected articles that have been published in various ATINER academic journals since the beginning of the COVID-19 pandemic. All of these essays have undergone a double-blind peer review process and have been accepted for publication. The aim of this survey is to summarize the main research findings of these papers and highlight their major conclusions. These papers cover research related to COVID-19 from a variety of research fields that include Health; Mass Media and Communication; Sociοlogy; Business and Economics; Tourism; Education; and Law. Keywords: COVID-19, pandemic, deaths, lockdowns, vaccinations, well-being, recovery plan, distance education
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This paper aims to systematically review the existing studies of corporate governance with organisational performance in the Fourth Industrial Revolution and put forward theories, research methods, topics, and variables that emerge from the review. The systematic literature review is based on 42 peer-reviewed journal articles on the topic written by reputable academics on the Science Direct Database focused on corporate governance, board characteristics, and ownership structure. This study’s conceptual framework is based on agency theory, which is the most widely used to analyse corporate governance (Fama & Jensen, 1983; Jensen & Meckling, 1976). The majority of results show a positive correlation between corporate governance and organisational performance (Pucheta-Martínez & Gallego-Álvarez, 2020) with agency theory being the most utilised theory of choice (Bergh, Ketchen, Orlandi, Heugens, & Boyd, 2019; Panda & Leepsa, 2017). This paper undertakes a significant thorough systematic review of corporate governance with firm performance and the Fourth Industrial Revolution literature. It gives an 11-year review with a reference index from 2011 to 2021, useful for both academics and professionals. This study recommends more evidence-based systematic reviews for different aspects and within different regions. It is further recommended to expand geographical spread across all continents to cover corporate governance area and to improve studies related to the Fourth Industrial Revolution and its impact on corporate governance. Lastly, it is recommended that more studies that look at the impact of the Fourth Industrial Revolution on corporate governance and firm performance should be performed.
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The Covid-19 pandemic has generated shocks that have caused economic fluctuations globally, calling for an understanding of the behaviour of macroeconomic variables. This study presents an early review of the macroeconomic impact of the Covid-19 pandemic in Nigeria. The aggregate supply and aggregate demand (AS-AD) model provides the theoretical motivation for the study. From the findings, while the number of infected cases reflects significant correlations with economic activity from the perspective of a trend analysis, the estimates from dynamic ordinary least squares (DOLS) show that nexuses between the number of confirmed cases and attendant macroeconomic outcomes are largely insignificant with the expected signs. The study has therefore shown that the Covid-19 pandemic has insignificant negative impacts on basic macroeconomic variables in Nigeria such as inflation, employment, exchange rate, GDP growth, among others. In other words, time is required before the established correlations withstand empirical scrutiny in terms of causality. As the government has engaged the Economic Sustainable Plan (ESP, 2020), which is a post-Covid-19 recovery plan, it is hoped that the attendant policies would be properly implemented so as to provide the critical mass to repositioning the country’s economy on the path towards inclusive and sustained economic development.
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The novel coronavirus (COVID-19) is challenging the world. With no vaccine and limited medical capacity to treat the disease, nonpharmaceutical interventions (NPI) are the main strategy to contain the pandemic. Unprecedented global travel restrictions and stay-at-home orders are causing the most severe disruption of the global economy since World War II. With international travel bans affecting over 90% of the world population and wide-spread restrictions on public gatherings and community mobility, tourism largely ceased in March 2020. Early evidence on impacts on air travel, cruises, and accommodations have been devastating. While highly uncertain, early projections from UNWTO for 2020 suggest international arrivals could decline by 20 to 30% relative to 2019. Tourism is especially susceptible to measures to counteract pandemics because of restricted mobility and social distancing. The paper compares the impacts of COVID-19 to previous epidemic/pandemics and other types of global crises and explores how the pandemic may change society, the economy, and tourism. It discusses why COVID-19 is an analogue to the ongoing climate crisis, and why there is a need to question the volume growth tourism model advocated by UNWTO, ICAO, CLIA, WTTC and other tourism organizations.
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Background/aim: Individuals infected by the Covid-19 potentially are at risk of health and economic well-being. Today, the Covid-19 is a global issue, and the world economy can be interpreted as almost at the standstill. In this context, this study aims to discuss the potential first reactions of short and long term global economic impacts of the pandemic through sectors by assessing its costs according to the data announced for both the world and Turkey. In addition, this study tries to put forth possible economic and political scenarios for the post-pandemic world. Materials and methods: This is a review article that summarizes the current reports and discussions about the economic consequences of this historical event, and tries to make some inferences considering them. Results: This pandemic has severe adverse effects on the employees, customers, supply chains and financial markets, in brief, most probably it will cause a global economic recession. Nevertheless, due to the uncertainty of the end of this pandemic, both the length and scale of this contraction are not predictable. Conclusion: It takes a while for the world economy to recover from the contraction. It seems that this pandemic will lead to a permanent shift in the world and its politics, especially in health, security, trade, employment, agriculture, manufacturing goods production and science policies. Since this new world might provide great opportunities for some countries that did not dominate world production before, governments should develop new strategies to adjust the new world order without much delay.
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How did a health crisis translate to an economic crisis? Why did the spread of the coronavirus bring the global economy to its knees? The answer lies in two methods by which coronavirus stifled economic activities. First, the spread of the virus encouraged social distancing which led to the shutdown of financial markets, corporate offices, businesses and events. Second, the exponential rate at which the virus was spreading, and the heightened uncertainty about how bad the situation could get, led to flight to safety in consumption and investment among consumers, investors and international trade partners. We focus on the period from the start of 2020 through March when the coronavirus began spreading into other countries and markets. We draw on real-world observations in assessing the restrictive measures, monetary policy measures, fiscal policy measures and the public health measures that were adopted during the period. We empirically examine the impact of social distancing policies on economic activities and stock market indices. We also empirically the effect of COVID infection cases and COVID deaths on macroeconomic performance during the 2020 to 2021 period. The findings reveal that the increasing number of lockdown days, monetary policy decisions and international travel restrictions severely affected the level of economic activities and the closing, opening, lowest and highest stock price of major stock market indices. We also find that the rising number of COVID cases and rising death cases led to a significant increase in global inflation rate, global unemployment rate, and global energy commodity index.
The COVID-19 pandemic has resulted in over 1.4 million confirmed cases and over 83,000 deaths globally. It has also sparked fears of an impending economic crisis and recession. Social distancing, self-isolation and travel restrictions forced a decrease in the workforce across all economic sectors and caused many jobs to be lost. Schools have closed down, and the need of commodities and manufactured products has decreased. In contrast, the need for medical supplies has significantly increased. The food sector has also seen a great demand due to panic-buying and stockpiling of food products. In response to this global outbreak, we summarise the socio-economic effects of COVID-19 on individual aspects of the world economy.
To overcome the limits on traditional monetary policy imposed by the effective lower bound on short-term interest rates, in recent years the Federal Reserve and other advanced-economy central banks have deployed new policy tools. This lecture reviews what we know about the new monetary tools, focusing on quantitative easing (QE) and forward guidance, the principal new tools used by the Fed. I argue that the new tools have proven effective at easing financial conditions when policy rates are constrained by the lower bound, even when financial markets are functioning normally, and that they can be made even more effective in the future. Accordingly, the new tools should become part of the standard central bank toolkit. Simulations of the Fed’s FRB/US model suggest that, if the nominal neutral interest rate is in the range of 2–3 percent, consistent with most estimates for the United States, then a combination of QE and forward guidance can provide the equivalent of roughly 3 percentage points of policy space, largely offsetting the effects of the lower bound. If the neutral rate is much lower, however, then overcoming the effects of the lower bound may require additional measures, such as a moderate increase in the inflation target or greater reliance on fiscal policy for economic stabilization. (JEL D78, E31, E43, E52, E58, E62)