Understanding small business resilience during COVID-19: a social cognitive analysis from Pakistan

This study examines how entrepreneurial restaurant businesses in Pakistan navigated immediate and long-term challenges during the COVID-19 pandemic. Drawing on Social Cognitive Theory (SCT), it explores how personal and environmental factors shaped strategic decision-making. A qualitative approach was used, involving two rounds of in-depth interviews with 12 small and medium-sized restaurant owners in Karachi, first during the crisis to capture initial responses, and later post-pandemic to assess long-term outcomes. The findings highlight that strong personal traits, including commitment to business continuity, religious faith, and a proactive mindset, were central to resilience. Environmental support from families, social networks, and government initiatives further strengthened coping capacity. Businesses that adopted digitalization, diversified products, and formed strategic partnerships demonstrated greater long-term sustainability. Observational learning from peers also enhanced operational efficiency and crisis preparedness. This study contributes to the understanding of crisis management in SMEs within emerging markets, particularly in South Asian contexts marked by institutional constraints, family business dominance, and socio-cultural influences. It underscores the critical role of socio-cultural context in shaping entrepreneurial resilience and offers practical implications for policymakers and practitioners, especially around digital adoption, financial support, and community engagement. Theoretically, the study extends SCT in three ways: by introducing religio-cognitive capital as a culturally embedded personal factor distinct from self-efficacy; by identifying circular credit networks as informal mechanisms bridging institutional voids; and by demonstrating a temporal shift in SCT dynamics, where the relative influence of personal, environmental, and behavioral factors evolves over the course of a crisis.