Strategic adaptation speed as a resilience mechanism: Linking market uncertainty to SME survival in emerging economies

Abstract

This study examines how perceived market uncertainty (PMU) influences the strategic adaptation speed (SAS) of small and medium-sized enterprises (SMEs) and how this mechanism contributes to their long-term survival in volatile environments. Drawing on dynamic capabilities theory, we analyze cross-sectional data from 385 Ecuadorian SMEs and apply Structural Equation Modeling (SEM) to test both direct and mediating effects. Results show that higher PMU significantly accelerates SAS (β = 0.42, p < 0.001), and SAS explains most of the positive influence of PMU on SME survival, accounting for 77% of the total effect. Firms exhibiting faster strategic responses, such as redesigning business models, accelerating product modifications, and forming timely alliances, were 2.7 times more likely to withstand economic shocks than slower-adapting firms. These findings reframe uncertainty not merely as a destabilizing force but as a trigger that activates adaptive routines and strengthens organizational continuity. Theoretically, the study provides one of the first empirical validations of the PMU–SAS–Survival pathway in an emerging economy, highlighting the role of time-sensitive strategic decisions in resilience building. A key policy implication emerges from the evidence: programs that combine agile financing instruments with capability-development training can enhance SMEs’ adaptive speed and reinforce their resilience to persistent market turbulence.