Good Times, Bad Times:: Innovation and Survival over the Business Cycle

Elena Cefis; Orietta Marsili

doi:10.1093/icc/dty072

Good Times, Bad Times: Innovation and Survival over the Business Cycle

Elena Cefis, Orietta Marsili

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Abstract

In times of crisis, policy makers call upon entrepreneurship as a remedy to an economic downturn. Yet, at these times new firms face intensified selection and survival hinges on heterogeneous capabilities. We examine how the founding innovative capabilities of new ventures created in the Netherlands in 2001-2006 affected their survival likelihood before, during and after the 2007-2008 global financial crisis. We estimate a piecewise exponential model linking survival times, from 2001 to 2015, to longitudinal innovation data from the Community Innovation Survey. New firms innovating within 2 years from their founding enjoy a long-term adaptive survival premium during and after the crisis. This premium and its duration over the stages of the crisis are contingent to the form of innovation: technological innovations entail a more effective and enduring premium, as compared with nontechnological innovations, which can be even detrimental for survival.

Original language	English
Article number	dty072
Pages (from-to)	565-587
Number of pages	23
Journal	Industrial and Corporate Change
Volume	28
Issue number	3
Early online date	14 Feb 2019
DOIs	https://doi.org/10.1093/icc/dty072
Publication status	Published - 30 Jun 2019

ASJC Scopus subject areas

Economics and Econometrics

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10.1093/icc/dty072

Accepted_FINAL_Cefis-Marsili_Good times, Bad Times_ICC SI_edited
This is a pre-copyedited, author-produced version of an article accepted for publication in Industrial and Corporate Change following peer review. The version of record Cefis, E & Marsili, O 2019, 'Good Times, Bad Times: Innovation and Survival over the Business Cycle', Industrial and Corporate Change, vol. 28, no. 3, dty072, pp. 565-587 is available online at: https://doi.org/10.1093/icc/dty072
Accepted author manuscript, 1.27 MB

Cite this

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abstract = "In times of crisis, policy makers call upon entrepreneurship as a remedy to an economic downturn. Yet, at these times new firms face intensified selection and survival hinges on heterogeneous capabilities. We examine how the founding innovative capabilities of new ventures created in the Netherlands in 2001-2006 affected their survival likelihood before, during and after the 2007-2008 global financial crisis. We estimate a piecewise exponential model linking survival times, from 2001 to 2015, to longitudinal innovation data from the Community Innovation Survey. New firms innovating within 2 years from their founding enjoy a long-term adaptive survival premium during and after the crisis. This premium and its duration over the stages of the crisis are contingent to the form of innovation: technological innovations entail a more effective and enduring premium, as compared with nontechnological innovations, which can be even detrimental for survival.",

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Good Times, Bad Times: Innovation and Survival over the Business Cycle

Abstract

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