Economic crisis, innovation and organizational responses: evidence from Brazil

Abstract

Purpose

The economic crisis of 2008 resulted in a unique context for the empirical experimentation of organizational learning and entrepreneurship theories from Schumpeterian inspiration. The purpose of this paper is to investigate how the economic downturns change the limits and possibilities to pursue both exploration and exploitation and thus achieve innovative performance.

Design/methodology/approach

This study examines an original database with the patent portfolio of 2,309 firms based in Brazil, covering a period of eight years preceding the 2008 economic crisis, that is 2000–2007, and five years thereafter, 2008–2013. To test the hypotheses empirically, the authors use the negative binomial model.

Findings

The findings add to the literature in two ways. First, this study found a positive association between exploitation and exploration behaviour and innovative performance. However, this relation is curvilinear because there are diminishing negative effects on innovation. Second, regarding the distinction between creative destruction and creative accumulation, the results support the prevalence of creative accumulation, although consistent with the notion of co-occurrence of both models.

Originality/value

This study expands the discussion on how entrepreneurs respond to the economic crisis in specific contexts of an emerging economy. We provide new empirical evidence through the exploration of a unique data set on the patent portfolio of 2,309 firms based in Brazil. Most of the previous literature has applied this topic to developed countries, and there are few studies that apply this topic outside the focus of US and European countries.