This study examines the role of social cohesion in fostering communities’ economic resilience, defined as their ability to positively adjust and maintain economic functioning while facing adversity. Covid-19 caused worldwide disruptions, forcing firms to close overnight as a measure to stop the virus from spreading. However, considerable within-country regional heterogeneity manifested in the impact of the various applied measures. Focusing on organization exits across 379 Dutch municipalities and applying a mixed methods approach, we argue and find that social cohesion – conceptualized as involving kinship and residential stability – increases communities’ economic resilience and that family firms are a conduit through which social cohesion affects economic resilience. Kinship creates the willingness to help other members, even if this means suffering some losses. Residential stability fosters a social infrastructure that is necessary for the quick mobilization of a community’s resources. Family firms mediate the relationship between social cohesion and economic resilience, by leveraging their long-term orientation, strong, community-embedded relationships, and internal resources.
Koornneef et al. (Tue,) studied this question.