Companies learning to innovate in recessions

• Autores: Mario Daniele Amore
• Localización: Research Policy, ISSN-e 1873-7625, Vol. 44, Nº. 8, 2015, págs. 1574-1583
• Idioma: inglés
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• Resumen

  • Innovating in downturns can affect corporate success by improving a firm’s position relative to competitors during the recovery period. However, increased uncertainty and more binding financial constraints complicate such innovation activity. I find that past experience with innovation during recessions improves a firm’s ability to invest in R&D when a new downturn hits. This result holds controlling for traditional drivers of innovation as cumulated innovations and financial constraints, as well as mitigating endogeneity and selection concerns. Moreover, I find that past experience with innovation during recessions is beneficial to patent outcomes after a new recession. Overall, the paper provides novel evidence on how business cycles shape innovative capabilities