Innovation Investments During The COVID-19 Pandemic
(2023) BUSN39 20231Department of Business Administration
- Abstract
- The authors of this paper identified a gap in the debate revolving around innovation during a crisis and recognized the importance of exploring whether being highly innovative is universally desirable across all sectors during times of crisis. While previous research has emphasized the positive impact of innovation on performance, it is essential to investigate the negative impact of innovation and whether there are limitations or thresholds beyond which excessive innovation may have diminishing returns or unintended consequences for small and medium sized companies. Furthermore, the strength of the relationship between investments in innovation and economic performance during times of crisis remains uncertain.
The study takes a... (More) - The authors of this paper identified a gap in the debate revolving around innovation during a crisis and recognized the importance of exploring whether being highly innovative is universally desirable across all sectors during times of crisis. While previous research has emphasized the positive impact of innovation on performance, it is essential to investigate the negative impact of innovation and whether there are limitations or thresholds beyond which excessive innovation may have diminishing returns or unintended consequences for small and medium sized companies. Furthermore, the strength of the relationship between investments in innovation and economic performance during times of crisis remains uncertain.
The study takes a quantitative approach with the aim to deepen the knowledge regarding the relationship between investments in innovation and economic performance for small and medium-sized companies defined as companies with a market cap equal to or less than $2B across different sectors during the COVID-19 pandemic. By examining the relationship between innovation and performance in small and medium-sized companies publicly traded on the U.S. exchange during pandemic. This study will aim to contribute to the literature on innovation and performance, providing practical implications for organizations seeking to enhance their innovation strategies and achieve sustainable performance outcomes in times with increased market volatility due to a crisis.
The study finds that there were no statistically significant relationship between investments and innovation during and after the pandemic. However, a negative statistically significant relationship in 2018 was identified. The study also finds no statistically significant difference between the three levels of R&D expenditure ratio examined. Furthermore, the study finds no statistical significance supporting the notion that the health care sector would benefit greater from innovation investments than the rest of the sectors examined in the study. The study then discusses the implications of these results from a risk management perspective, hoping to add to the current literature and aid in the conversation about risk management to prevent managers from overinvesting in innovation to achieve desired economic outcomes in challenging circumstances. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9130032
- author
- Kellerman, Philip LU and Lingevik, Gustav LU
- supervisor
-
- Phil Flores LU
- organization
- course
- BUSN39 20231
- year
- 2023
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Innovation investments, Risk and crisis management, Abnormal returns, Economic performance, R&D, COVID-19 Pandemic
- language
- English
- id
- 9130032
- date added to LUP
- 2023-06-29 09:07:20
- date last changed
- 2023-06-29 09:07:20
@misc{9130032,
abstract = {{The authors of this paper identified a gap in the debate revolving around innovation during a crisis and recognized the importance of exploring whether being highly innovative is universally desirable across all sectors during times of crisis. While previous research has emphasized the positive impact of innovation on performance, it is essential to investigate the negative impact of innovation and whether there are limitations or thresholds beyond which excessive innovation may have diminishing returns or unintended consequences for small and medium sized companies. Furthermore, the strength of the relationship between investments in innovation and economic performance during times of crisis remains uncertain.
The study takes a quantitative approach with the aim to deepen the knowledge regarding the relationship between investments in innovation and economic performance for small and medium-sized companies defined as companies with a market cap equal to or less than $2B across different sectors during the COVID-19 pandemic. By examining the relationship between innovation and performance in small and medium-sized companies publicly traded on the U.S. exchange during pandemic. This study will aim to contribute to the literature on innovation and performance, providing practical implications for organizations seeking to enhance their innovation strategies and achieve sustainable performance outcomes in times with increased market volatility due to a crisis.
The study finds that there were no statistically significant relationship between investments and innovation during and after the pandemic. However, a negative statistically significant relationship in 2018 was identified. The study also finds no statistically significant difference between the three levels of R&D expenditure ratio examined. Furthermore, the study finds no statistical significance supporting the notion that the health care sector would benefit greater from innovation investments than the rest of the sectors examined in the study. The study then discusses the implications of these results from a risk management perspective, hoping to add to the current literature and aid in the conversation about risk management to prevent managers from overinvesting in innovation to achieve desired economic outcomes in challenging circumstances.}},
author = {{Kellerman, Philip and Lingevik, Gustav}},
language = {{eng}},
note = {{Student Paper}},
title = {{Innovation Investments During The COVID-19 Pandemic}},
year = {{2023}},
}