The Mediating Role of Crisis Management Practices in the Influence of Financial Wellness on Business Resilience among Small and Medium Enterprises (SMEs)

Abstract

This study examines the role of crisis management practices as a mediating mechanism in the relationship between financial wellness and business resilience among Small and Medium Enterprises (SMEs) in Cagayan de Oro City, Philippines. While financial wellness is widely recognized as a critical driver of business sustainability, limited empirical research explains how it translates into resilience outcomes, particularly in localized SME contexts. Using a quantitative, descriptive-correlational design, data were collected from 195 SME owners and managers through a structured questionnaire. The study employed descriptive statistics, multiple linear regression, and mediation analysis to examine the relationships among variables. Findings reveal that SMEs exhibit high levels of financial wellness, crisis management practices, and business resilience. Financial wellness has a statistically significant but relatively small direct effect on business resilience. However, mediation analysis confirms that crisis management practices partially mediate this relationship, indicating that financial capacity enhances resilience both directly and indirectly through structured crisis preparedness, response, and recovery mechanisms. The study contributes to the literature by empirically demonstrating that financial wellness alone is insufficient to ensure resilience; rather, its effectiveness depends on the firm’s ability to operationalize resources through crisis management practices. The findings provide practical implications for SME owners, policymakers, and support institutions in strengthening resilience through integrated financial and strategic management approaches. Furthermore, future researchers are encouraged to expand the study across different locations and industries to improve generalizability, examine additional variables such as innovation capability and digital transformation, and may utilize advanced methods to analyze more complex relationships influencing business resilience.