Economic crisis, innovation and organizational responses: evidence from Brazil

Abstract

The economic crisis of 2008 resulted in a unique context for the empirical experimentation of organizational learning theories and patterns of technological accumulation from Schumpeterian inspiration. This paper investigates the effects of the economic crisis on the innovative performance of firms. We examine an original database with the patent portfolio of 2309 firms based in Brazil, covering a period of eight years preceding the 2008 economic crisis and the five years thereafter. Our finds add to the literature in two ways. First, we exhibit evidence that despite the positive relationships between exploitation and exploration behaviour and innovative performance widely described in the extant literature, in periods of crisis this relationship is curvilinear, in that former exerts diminishing negative effects on the latter. Second, from the literature that perceives a clear division between creative destruction and creative accumulation, our results tend tends to support the thesis in favour of the existence of a creative accumulation, although consistent with the notion of co-occurrence of both models. The article concludes by highlighting what we have learnt from this experience and suggesting some new avenues for research.