Firm characteristics, financial variables and types of innovation: influence in Spanish firms' survival

Much emphasis has been placed on the importance of firms' innovation to survive and prosper in today's economic environment. At the same time, it is generally accepted that innovation often increases the financial risk of firms and, as a result, their failure risk. Using a dataset of 148 Spanish SMEs, we analyse the impact of innovative activities on firms' survival over the period 2010–2012. The results show that the firms' financial performances have important effects on survival with regard to innovative activities: whereas commercial innovation keeps the firm away from bankruptcy, product innovation increases the survival chances of firms. The novelty of this research is the use of a systemic approach that interrelates financial variables, innovation and firm survival.