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External shocks and enterprises' dynamic capabilities in a time of regional distress

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  • Jarle Aarstad
  • Olav Andreas Kvitastein
  • Marte C. W. Solheim

Abstract

We study if dynamic capabilities alleviate enterprises' revenue losses after an external shock. Contextually, we study Norwegian enterprises before and after the price decline of crude oil in 2014, which strongly affected economic activities across industries in some regions, while others were practically unaffected. Empirically, we combine data of regional oil dependency and enterprise‐ and person‐level data before the decline and enterprise‐level revenues before and after the decline. Analyses of 4,060 enterprises in 51 labor market regions show that unrelated education diversity alleviates revenue losses for enterprises in strongly affected regions, while related education diversity has an opposite negative effect. R&D investments and innovation alter revenue growth, but as the effects are consistent across more or less affected regions, the concepts are static enterprise resources and not dynamic capabilities.

Suggested Citation

  • Jarle Aarstad & Olav Andreas Kvitastein & Marte C. W. Solheim, 2021. "External shocks and enterprises' dynamic capabilities in a time of regional distress," Growth and Change, Wiley Blackwell, vol. 52(4), pages 2342-2363, December.
    • Handle: RePEc:bla:growch:v:52:y:2021:i:4:p:2342-2363
    DOI: 10.1111/grow.12531
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    References listed on IDEAS

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    1. Jarle Aarstad & Olav Andreas Kvitastein, 2023. "Effect of Long-Term Absenteeism on the Operating Revenues, Productivity, and Employment of Enterprises," Administrative Sciences, MDPI, vol. 13(6), pages 1-10, June.

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