Are the pandemic and innovation twins? Perceived financial obstacles, innovations, and entrepreneurial success

We investigate how pre-crisis obstacles of enterprises determine the impact of the COVID-19 pandemic in selected European countries. Moreover, we examine the effects of the coping strategies, in particular of innovation, and digitalization, to respond to the pandemic challenge. Thus, we try to contribute to a more granular understanding of the dynamics that play a pivotal role in managing a crisis. The analysis uses survey data of six European countries from the Enterprise Surveys carried out in 2018 and 2019 and their follow-up survey during the COVID-19 crisis in 2020. Overall, the results indicate that companies that had already previously (before the crisis) reported perceived difficulties with access to financial resources have been more severely constrained during the pandemic. Moreover, companies that adopt innovative approaches during the pandemic perform better. Finally, digitalization strategies are not significantly related to entrepreneurial success. Our analysis reveals the importance of strategic planning of companies and the provision of an environment conducive to innovation by policymakers.