Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak Province, Vietnam

Abstract

Purpose: This paper aims to analyze the entrepreneurial situation during the COVID-19 pandemic, focusing on firms in the tourism sector. Specifically, we seek to identify factors that belong to the Entrepreneurial Ecosystem (EE) of Dak Lak province, supporting entrepreneurial firms' survival during the COVID-19 pandemic. Theoretical framework: We applied the EE model developed by Isenberg (2011) to the province of Dak Lak, where we analyzed the effects of EE on the ability of new businesses in the community-based tourism sector to withstand the impact of the COVID-19 pandemic. Design/methodology/approach: We conducted a survey of 206 entrepreneurs, of whom 108 are entrepreneurs in the tourism sector or communities-based tourist destinations. These surveyed entrepreneurs participated in two startup contests the Dak Lak Province organized in 2018 and 2020. Findings: It was found that the COVID-19 pandemic particularly devastated small businesses in the travel and tourism sector. In addition, only two components of EE provide relief to these companies: FINANCE and CULTURE. Without a doubt, microcredit, loans, and debt refinancing funds, as well as the general liquidity of the financial market, help young businesses stay afloat. Additionally, the community's culture of risk-taking, failure acceptance, success-seeking, and lofty aspirations underpins their attempt to keep the business afloat during difficult times. Research, Practical & Social implications: We suggested that Dak Lak province develop its EE by upgrading its elements as soon as possible to cope with future crises. Originality/value: This study gives a new direction on the specific approach to improve the EE of a province of Vietnam and shows ways for better performance of the EE. Conclusion: We found that FINANCE and CULTURE components play a positive role in assisting early-stage tourism firms. Specifically, the availability and accessibility of the financial market, including micro-credit, support entrepreneurial firms in maintaining their operation. In addition, the culture of tolerance of risks and failure, efforts for success, and high ambition is the basis for the action of entrepreneurs to continue their businesses.