Navigating the emerging market context: Performance implications of effectuation and causation for SMEs during adverse economic conditions in Russia.

Strategic Entrepreneurship Journal. 2020. Vol. 14. P. 470–500.

Shirokova G., Osiyevskyy O., Laskovaia A., MahdaviMazdeh H.

This study aims to broaden the understanding of effectuation and causation by investigating their effectiveness for small and medium enterprises (SMEs) in the emerging market context during adverse economic conditions. We embrace a holistic view of the performance implications of these behavioral logics, theorizing and empirically testing their impact not only on the level of firm performance but also on its variability. The findings suggest that emerging market conditions create significant contingencies in the relationships between effectuation, causation, and firm performance, substantively affecting their effectiveness. In particular, we demonstrate that for the firms affected by adverse conditions, causation brings marginal performance improvements while also making it highly unreliable (variable), whereas effectuation leads to performance improvements coupled with higher reliability.

Keywords: Russia, emerging markets, causation, Performance variability, Effectuation