Behavioral Economics and Its Positive Impact on Overcoming the Corona Pandemic among Owners of Small And Medium Enterprises

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Dr. Manal Mashabab Alqahtani, Dr. Ahmed Hamza, Tahani Saad AL-Nawwash


This research is intended to study the effect of behavioral economics in facing coronavirus pandemic on the small-medium enterprises and to investigate the impact of this pandemic on the alternative economic behaviors of the owners of these firms. For achieving the study objectives, the correlation descriptive approach was applied on a sample of (200) firms in Riyadh. The study concluded that (58) enterprises (29%) can endure stopping of activities for more than one year in case that work will not resume in March, 2021, there are (52) firms (26%) expect that the estimated effect of this pandemic on operation incomes of the first half of 2020 is a yearly decrease by more than (50%), and that (48) firms (24%) see that there is no estimated effect of the pandemic on manpower during the 1st half of 2020, as the costs of rent, consumption of water and electricity and power were on the top of challenges faced by small-medium enterprises during the pandemic period by frequency of (45) and ratio (17%), followed by finance (41) and ratio (20.5%). The market low demand was the greatest challenge faced by business market during pandemic period by frequency (47), (23.5%), followed by challenges related to delayed or failed delivering orders by frequency (39) (19.5%), and that there are 62 firms (31%) stopped their operations ,yet, they resumed them now. The results showed also that there are (101) firms (50.5%) whose returns have decreased due to the pandemic COVID-19 by ratios of (25- 50%). The study recommended conducting more research and studies on behavioral economics, as the Arab Library lacks in-depth research in this new field and what is available is only written in foreign languages, and the need to use behavioral interventions in public areas such as education, health, rationalization of consuming electricity and water, the activities of charities societies, banks, companies and universities.

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