Economic Crisis, Innovation Strategies and Firm Performance. Evidence from Italian Firm-level Data
AbstractSeveral empirical works have shown the robust and positive relation between growth and innovation at macroeconomic level and between firm economic performance and innovation at microeconomic level. However, the economists have had less opportunities to study such linkages during severe global downturns of the economic cycle. Moreover, the present disruptive economic downturn has forced the firms to implement survival strategies. One of such strategic behaviour regards the way of intervention on product and process areas through innovative actions. Focusing the attention on the micro level, the present work provides an empirical analysis on the basis of more than 500 Italian manufacturing firms located in Emilia-Romagna region, with the aim of disentangling the relations between pre-crisis innovation strategies and firm economic performance during the crisis as well as the linkages between the innovative actions taken to react to the recession's challenges and the economic performance in the recession. The results suggest the existence of strong relationships between past innovative activities and the capacity to react to the challenges brought by the crisis through innovative actions along product, process and organization/HRM dimensions, although the role of complementarities among past innovative activities does not emerge robustly. When the dependent variables are performance indicators the impact of pre-crisis innovation strategies emerges as robust for technological and organizational spheres, while intense innovative activities before the crisis on spheres like ICT, training and environment are detrimental for performances in the crisis. It seems that when the crisis hits those firms in a process of quite radical transformation and change, then the negative economic consequences of the recession are worse than in the case of firms on a more stable, less dynamic path.
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Bibliographic InfoPaper provided by University of Ferrara, Department of Economics in its series Working Papers with number 201102.
Length: 40 pages
Date of creation: 04 Jan 2011
Date of revision:
innovation strategies; economic crisis; firm performance;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
- NEP-CSE-2011-03-19 (Economics of Strategic Management)
- NEP-INO-2011-03-19 (Innovation)
- NEP-SBM-2011-03-19 (Small Business Management)
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- Anna Maria Ferragina & Fernanda Mazzotta & Erol Taymaz & Kamil Yilmaz, 2013.
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