Retrenchment activities of small firms during economic downturn: An empirical investigation

Recent advances in the ope rationalization of retrenchment strategies have aroused interest in the investigation of its relationship to company performance. Limited evidence exists, however, concerning retrenchment's value for procyclical firms as the means to counter declining economic conditions. This study provides a longitudinal analysis of retrenchment activities and financial Performance during macroeconomic recession. Results indicate that many common retrenchment activities improve small firm Performance during economic downturn.