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Persistence of innovation in unstable environments: Continuity and change in the firm's innovative behavior

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  • Suárez, Diana

Abstract

The concept of persistence is generally used to define the positive relationship between past and present innovations, which is explained by feedback and accumulation processes triggered by the firm's past results. This paper states that changes in the economic or institutional conditions of the environment impact on the type of profitable innovations, and past innovations might not be suitable for the new environment. As a result, firm's innovative behavior might change, which means that the firm's set of decisions about engaging in the seek for innovations or not and, if so, the set of investments and capabilities it allocates to innovate could be modified. Empirical evidence is provided to reject the persistence hypothesis and to show that past innovations do not necessarily impact present ones. This paper examines the relationship between past and present innovations for a group of Argentinean firms during 1998–2006, which coincides with a period of macroeconomic instability. Results suggest that persistence has to be analyzed in terms of a dynamic firm's innovative behavior—regardless of its results—and how it allows the firm to accumulate competences and resources, which increases the odds of successfully responding to changes in the environment and continuing to innovate.

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  • Suárez, Diana, 2014. "Persistence of innovation in unstable environments: Continuity and change in the firm's innovative behavior," Research Policy, Elsevier, vol. 43(4), pages 726-736.
    • Handle: RePEc:eee:respol:v:43:y:2014:i:4:p:726-736
    DOI: 10.1016/j.respol.2013.10.002
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    2. Hyejin Cho & Pyoungsoo Lee & Choong Ho Shin, 2022. "Executive Turnover and Founder CEO Experience: Effect on New Ventures’ R&D Investment," Economies, MDPI, vol. 10(5), pages 1-13, April.
    3. Juan Jesus Arenas & Juan Erasmo Gómez & Efraín Ortiz & Freddy Paz & Carlos Parra, 2020. "Elements of the Persistence in Innovation: Systematic Literature Review," Administrative Sciences, MDPI, vol. 10(4), pages 1-14, October.
    4. Cristiano Antonelli & Francesco Crespi & Giuseppe Scellato, 2018. "Productivity growth persistence: firm strategies, size and system properties," Chapters, in: The Evolutionary Complexity of Endogenous Innovation, chapter 8, pages 176-202, Edward Elgar Publishing.
    5. Marta F. Arroyabe & Martin Schumann, 2022. "On the Estimation of True State Dependence in the Persistence of Innovation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(4), pages 850-893, August.
    6. Anna Wziątek-Kubiak & Marek Pęczkowski, 2021. "Strengthening the Innovation Resilience of Polish Manufacturing Firms in Unstable Environments," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 716-739, June.

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