ECONOMIC ADJUSTMENTS OF SMALL AND MEDIUM ENTERPRISES IN THE CONTEXT OF THE COVID-19 PANDEMIC: A CASE STUDY OF THE MUNICIPALITY OF KRIVA PALANKA

Апстракт

This paper examines the impact of crisis conditions on the development, resilience, and performance of small and medium enterprises (SMEs) in the Municipality of Palanka, with specific emphasis on the challenges triggered by the COVID-19 pandemic and subsequent socioeconomic disruptions. SMEs represent the backbone of the local economy and a major driver of employment, innovation, and community stability; however, their limited financial capacity, organizational structure, and vulnerability to external shocks expose them to significant risks during crises. Grounded in contemporary theoretical insights and empirical research, this study aims to identify how SMEs in Palanka adapted their operations, which coping mechanisms proved effective, and what forms of institutional support were most relevant.
Using a mixed-method approach, the study integrates findings from international literature (Adian et al., 2020; Fairlie, 2020; Kuckertz et al., 2020), national regulatory frameworks, and primary data collected through questionnaires with local entrepreneurs. The results indicate that SMEs in Palanka experienced sharp declines in liquidity, reduced demand, supply chain interruptions, and organizational restructuring pressures. Despite these challenges, a substantial number of enterprises demonstrated adaptability through accelerated digitalization, product/service diversification, improved cost management, and workforce reorganization.
Findings also show that government measures were perceived as moderately helpful but insufficiently accessible or timely for many enterprises. Local-level institutions played a crucial role in information dissemination and administrative support but lacked the capacity for strategic, long-term interventions. The study concludes that sustainable SME development in crisis conditions requires a systemic model combining financial instruments, advisory support, digital capacity building, and stronger coordination between local and national policy makers. The insights provided can serve as evidence-based recommendations for strengthening the resilience and competitiveness of SMEs in the Municipality of Palanka and similar local contexts.