Entrepreneurial Continuance & COVID-19: The Role of Relational Embeddedness & Institutional Support

Abstract

Building on the Theory of Planned Behavior (TPB), this paper investigates how relational embeddedness and Perceived External Institutional Support (PEIS) influence entrepreneurs’ intention to keep ventures afloat during the COVID-19 pandemic (i.e., Intention for Entrepreneurial Continuance or IEC). We surveyed 295 entrepreneurs of small business owners in China in December 2020 and analyzed the data using structural equation modelling. Relational embeddedness and PEIS both significantly influenced IEC through the mediating effects of the three TPB determinants (attitude, subjective norms and perceived behavioral control). While subjective norms did not directly influence intention, they could still affect intention by influencing attitude. Entrepreneurs’ post-pandemic recovery prospects during the pandemic also did not moderate the three TPB determinants or IEC. The study contributes to research on entrepreneurial resilience by providing a more nuanced perspective of how entrepreneurs make decisions to continue or exit their ventures during periods of external shock and disruption. Besides the TPB factors being important in ensuring that small businesses continue to survive, this paper also adds to research on social capital by demonstrating the strong predictive power of relational embeddedness, which significantly determined entrepreneurs’ continuance intention through the TPB mediators. It also provides evidence that institutional support serves as a salient antecedent of the TPB determinants and continuance intention. Moreover, it finds that internal migrant entrepreneurs face greater entrepreneurial barriers to keep their businesses going during