R&D and firm resilience during bad times

Arbeitspapier

Can being innovative help firms to shield themselves from the disruptive effects of a recession? Using data for Spanish manufacturing firms, this paper finds that innovative firms suffered considerably less compared to noninnovative firms during the Great Recession. The operating mechanism for the resilience of innovative firms to market disruption during a recession is product differentiation, and not reduction in marginal cost of production and prices with process innovation. The data does not support alternative explanations such as better access to capital, or difference in labour moving costs for innovative firms. The results provide evidence for the role of innovation in making firms dynamically capable and resilient to large negative shocks.

Object Details

• ISBN: 978-3-86304-351-3
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DICE Discussion Paper ; No. 352

Classification and Topics

• Classification: Wirtschaft ; Firm Performance: Size, Diversification, and Scope ; Innovation; Research and Development; Technological Change; Intellectual Property Rights: General ; Innovation and Invention: Processes and Incentives ; Business Fluctuations; Cycles
• Subject: Innovation ; Recession ; Resilience ; Product differentiation ; Dynamic capability

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gupta, Apoorva
• Event: Veröffentlichung
• (who): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (where): Düsseldorf
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/225232
• Last update: 10.03.2025, 11:43 AM CET