’Innovate or Perish?’: Companies under crisis
Dublin Core
Title
’Innovate or Perish?’: Companies under crisis
Subject
Innovative strategy
Crisis
Difference-In-Difference
Threshold of innovation
Investment in innovation
Performance
Crisis
Difference-In-Difference
Threshold of innovation
Investment in innovation
Performance
Description
This paper tests the behavioral firm theory by examining exogenous economic shocks to explore whether switching to an innovative strategy is always reasonable. A quasi-experimental design – difference-indifference – has been run on 1000 companies for 11 years to explore the consequences of strategic shifts towards innovations. It is found that companies that introduced innovations do not have any substantial differences from those that kept the ‘status quo’. However, those few companies that decided to follow a proactive strategy during crisis by introducing new R&D projects outperform their rivals in the medium-term. A nonlinear relation between the decision to switch to an innovative strategy and related performance suggests that returns to scale exist. Only those cases of innovative shifts that enable the growth of more than 50% in intangible assets on average and more than 30% in a recession appear to be successful and lead to higher performance for companies.
Creator
Elena Shakina, Angel Barajas
Source
https://www.sciencedirect.com/journal/european-research-on-management-and-business-economics/vol/26/issue/3
Publisher
Elsevier Espana, S.L.U
Date
14 July 2020
Contributor
Sri Wahyuni
Rights
ISSN: 2444-8834
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Internasional European Research on Management and Business Economics 2020
Files
Collection
Citation
Elena Shakina, Angel Barajas, “’Innovate or Perish?’: Companies under crisis,” Repository Horizon University Indonesia, accessed March 14, 2025, https://repository.horizon.ac.id/items/show/6705.