The paper researches the effects of the 2008 financial crisis on various measures of firm governance, including the impact on firm boundaries such as buyer–supplier relationship, capital structure, and employment effects. Using a unique data set of 1686 Eastern European firms, we examine how the crisis affected the financial and employment decisions of different industrial and service sector firms. As these firms faced a steep decline in sales and capacity utilization, as well as credit constrains, they were forced to make significant and far reaching changes in various aspects of their operations. We discuss the implications of these changes. Copyright © 2013 John Wiley & Sons, Ltd.