Surviving the times of crisis : Does innovation make a difference?
(2014) In International Journal of Technological Learning, Innovation and Development 7(2). p.124-146- Abstract
The recent economic crisis caught many by surprise. Yet some firms were better prepared to weather the downturn than others. Using a unique micro dataset of shareholding companies from emerging countries in Eastern and Southern Europe derived from the World Bank's Enterprise Surveys, we econometrically test the hypothesis that pre-crisis innovation affected their survival odds and performance thereafter. Overall, the results indicate that the innovation-survival connection holds. Nevertheless, firms that have been identified as innovating excessively before the crisis turned out to be far more likely to die, whereas cautious innovators came out better off. Firms that stretched their resources too much, that were too bold, faced dire... (More)
The recent economic crisis caught many by surprise. Yet some firms were better prepared to weather the downturn than others. Using a unique micro dataset of shareholding companies from emerging countries in Eastern and Southern Europe derived from the World Bank's Enterprise Surveys, we econometrically test the hypothesis that pre-crisis innovation affected their survival odds and performance thereafter. Overall, the results indicate that the innovation-survival connection holds. Nevertheless, firms that have been identified as innovating excessively before the crisis turned out to be far more likely to die, whereas cautious innovators came out better off. Firms that stretched their resources too much, that were too bold, faced dire consequences. If appetite for risky innovation is sociably desirable and the crisis weeds out viable businesses, including those that may drive the recovery, there is a role for public policy to mitigate the short-lived selection inefficiencies that proliferate during severe recessions.
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- author
- Sidorkin, Oleg and Srholec, Martin LU
- publishing date
- 2014-01-01
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Eastern Europe, Economic crisis, Exit, Innovation, Micro data, Southern Europe, Survival
- in
- International Journal of Technological Learning, Innovation and Development
- volume
- 7
- issue
- 2
- pages
- 23 pages
- publisher
- Inderscience Publishers
- external identifiers
-
- scopus:84915731660
- ISSN
- 1753-1942
- DOI
- 10.1504/IJTLID.2014.065881
- language
- English
- LU publication?
- no
- id
- fdbfe19e-6c70-4bc2-b09c-eef0d16074a8
- date added to LUP
- 2016-05-18 13:16:00
- date last changed
- 2022-03-23 23:15:23
@article{fdbfe19e-6c70-4bc2-b09c-eef0d16074a8,
abstract = {{<p>The recent economic crisis caught many by surprise. Yet some firms were better prepared to weather the downturn than others. Using a unique micro dataset of shareholding companies from emerging countries in Eastern and Southern Europe derived from the World Bank's Enterprise Surveys, we econometrically test the hypothesis that pre-crisis innovation affected their survival odds and performance thereafter. Overall, the results indicate that the innovation-survival connection holds. Nevertheless, firms that have been identified as innovating excessively before the crisis turned out to be far more likely to die, whereas cautious innovators came out better off. Firms that stretched their resources too much, that were too bold, faced dire consequences. If appetite for risky innovation is sociably desirable and the crisis weeds out viable businesses, including those that may drive the recovery, there is a role for public policy to mitigate the short-lived selection inefficiencies that proliferate during severe recessions.</p>}},
author = {{Sidorkin, Oleg and Srholec, Martin}},
issn = {{1753-1942}},
keywords = {{Eastern Europe; Economic crisis; Exit; Innovation; Micro data; Southern Europe; Survival}},
language = {{eng}},
month = {{01}},
number = {{2}},
pages = {{124--146}},
publisher = {{Inderscience Publishers}},
series = {{International Journal of Technological Learning, Innovation and Development}},
title = {{Surviving the times of crisis : Does innovation make a difference?}},
url = {{http://dx.doi.org/10.1504/IJTLID.2014.065881}},
doi = {{10.1504/IJTLID.2014.065881}},
volume = {{7}},
year = {{2014}},
}