Essays on Innovation as a Resilience Strategy

This dissertation examines innovation as a resilience strategy. It consists of three interrelated chapters that study how innovation affects corporate resilience in the United States, the Euro Area, and the United Kingdom. In the first chapter, co-authored with my supervisor, I advance a new theoretical framework on how innovation affects resilience. Specifically, I build on prior literature in the field of management, arguing that the relationship between innovation and resilience can be conceived across the three phases of crisis management: anticipation, response, and recovery. Innovation at the crisis anticipation phase enables resilience as impact resistance, and innovation at the crisis response phase enables resilience as recovery speed. I use the financial statements and stock price data of 925 publicly traded companies in the United States to test the hypotheses advanced in the first chapter. The second chapter builds on the first chapter, arguing that the relationship between innovation and resilience varies across countries that are institutionally different and implement different policies during crises, a proposition that is supported by the literature on institutions and economic growth. I use data of 1,209 companies in the 19 Euro Area member states, countries that are in a monetary union but do not form a fiscal union. I find that the relationship between innovation and resilience is stronger in civil law countries that provide tax incentives for innovation under crisis conditions, such as Germany. Finally, the third chapter argues that due to public policy, the relationship between innovation and resilience also varies within the same country. I use data of 313 companies headquartered across 12 regions in the United Kingdom, a country that is characterized by disparities in regional development. I find that innovation has a stronger impact on resilience in regions that receive greater funding for research and innovation. Overall, this dissertation provides a comparative examination of how innovation affects resilience over time and space: I use high-frequency data of around 2,500 companies headquartered in 21 advanced economies, with around 380,000 company-week observations before and during the COVID-19 pandemic.