Innovation in times of crisis: Does pre-existing innovation experience matter?

Previous research shows that innovations help companies to overcome crises. But it is still unclear whether and to what extent external shocks force companies without or less pre-existing innovation experience to innovate and how successful these innovations are to improve the economic situation. This study investigates how innovations may help companies to perform better during macroeconomic crisis. In doing so we distinguish between innovators with and without pre-existing innovation experience. Our results show that companies which are affected by the crisis are more likely to innovate as a reaction. These innovations out of necessity have a significant positive effect on the economic situation of companies. Innovators without preexisting innovation experience can even gain a competitive advantage over non-innovative companies by acting proactively during the crisis. But these positive effects are stronger for companies with pre-existing innovation experience. Hence, we observe that pre-existing innovation experience is helpful to implement innovations during a crisis in a successful way.