The link between corporate strategy and innovation in developing countries: The post-crisis trends and challenges

This study aims to identify interrelationships between corporate strategy and innovation in developing countries in the post-COVID-19 context. The purpose of the study is to form a model that would allow to consider and process the impact of the innovational operations to the choice of the corporate strategy and its development within the operational domains of the developing countries, which ultimately can be able to meet the challenges in their economic growth and therefore contribute to the better outcomes of the post-crisis situations. The research hypotheses are that the post-crisis innovation activities do not depend on (H1) the ownership of the firm, (H2) its scale of operation, (H3) and industry but on (H4) the firm’s life cycle stage, and (H5) the strategy complexity level. Here, the survey of 424 random respondents from 424 Chinese firms provides evidence that refutes the first and third hypotheses (H1 and H3) while confirming other hypotheses (H2, H4 and H5). In addition, most respondents disagreed with the statement that “innovation is of secondary importance during the post-crisis period,” which suggests that innovation is a prerequisite for sustainable development. In addition to the previous research connected with the issues of corporate strategy and innovation, the present study has come up with the original hypotheses providing refutations and a new vision to the problem. The research findings present an extension to the understanding of corporate strategy and innovation during the post-crisis period, hence leading to the emergence of the up-to-date instruments able to solve the issues of the real economy after the COVID-19 crisis. The questionnaire, chosen as the research method, consisted of 18 2-section items, including a 7-item respondent profile and a 9-item analytical section. The respondent profile’s questions were: year of establishment of the firm (Q1), form of ownership (Q2), respondent’s position at the enterprise (Q3), sector in which the firm operates (Q4), firm size (Q5), profitability dynamics (Q6) and employment dynamics (Q7). The analytical section asked about the corporate strategies and innovation interactions. Q11 and Q12 resulted in 19.3% and 23.2% higher positive choice by private and limited liability firms, agricultural firms’ results were 27.3% below the average, start-ups and new firms’ activities demonstrated 14.7% more intensive innovative steps. Diversification is linked to the increased involvement into innovations, while the decreased level of innovation activity is linked to merger and acquisition practices. Ultimately, the first and second hypotheses (H1 and H3) were empirically proved to be false, and the remaining hypotheses (H2, H4 and H5) were confirmed. The present findings can be used to inform corporate strategy decisions in the real sector of the economy after the COVID-19 pandemic.