Abstract
We revisit the relationship between innovation and survival, tracking how innovation types (product, process, organizational, and marketing innovation) relate to exit routes (closure, failure, M&A) during different phases of the business cycle (i.e. normal times, the 2007–08 financial crisis and subsequent recovery). In particular, we implemented a new (to the economic field) econometric approach, landmark analysis, to include time-varying covariates in survival models with competing exit routes on our representative sample of Dutch firms (obtained merging monthly register data with biennial innovation surveys, for 2006–2015). Our most straightforward result is that each type of innovation, across the different phases of the business cycle, affects, in a substantially different way, the likelihood to exit the market through different modes of exit. Innovations seems to grant some innovation premium, but no common pattern appears between the evolution of the relationships between different types of innovation and exit routes across the business cycle.
| Original language | English |
|---|---|
| Article number | 104778 |
| Journal | Research Policy |
| Volume | 52 |
| Issue number | 8 |
| Early online date | 13 Jun 2023 |
| DOIs | |
| Publication status | Published - 1 Oct 2023 |
| Externally published | Yes |
Funding
The authors thank Cristina Bettinelli, Tommaso Ciarli, Hans van Houwelingen, Francesca Lotti, Stephane Lhuillery, Jacques Mairesse, Francesco Manaresi, Orietta Marsili, Alberto Marzucchi, Paul Nightingale, Maria Savona, Simone Vannuccini, and the participants at SPRU Freeman Seminars at the University of Sussex, Oct.19; 2018, Brighton, UK; Université Paris 1 Panthéon-Sorbonne Workshop: "Innovation, Entrepreneurship and organizational behavior", Dec. 6–7, 2018, Paris, France; Bank of Italy – CEPR – EIEF Conference: “Firm Dynamics and Economic Growth”, Dec. 19–20, 2018, Rome, Italy, as well as the Editor, John Walsh, and three anonymous reviewers, for helpful suggestions and comments. Any remaining errors are ours alone. The empirical part of this research was carried out at Microdata – Centraal Bureau voor Statistiek (CBS), the Netherlands. The views expressed in this paper are those of the authors and do not necessarily reflect the policies of Statistics Netherlands. Elena Cefis acknowledges financial support from the University of Bergamo (grants ex 60%, n. 60CEFI17 and n. 60CEFI18). Alex Coad gratefully acknowledges financial support from the National Research Foundation of Korea (Basic Science Research Program, funded by the Ministry of Education ; 2021R1A6A1A14045741 ), and Grant-in-Aid for Scientific Research A (No. B1K401072101 ), and Grant-in-Aid for Scientific Research (B) (No. 21H00719 ) from the Japan Society for the Promotion of Science .
Keywords
- Cumulative incidence function
- Financial crisis
- Firm-level innovations
- Landmark analysis
- Modes of firm exit
- Survival analysis
ASJC Scopus subject areas
- Strategy and Management
- Management Science and Operations Research
- Management of Technology and Innovation