Innovative Drivers of External Competitiveness for Small Businesses during the Great Recession. A new GLO Discussion Paper by GLO Fellows Emanuele Brancati & Dario Guarascio and colleagues.

A new GLO Discussion Paper documents not only the strict correlation between internationalization and innovative activities but also a positive change of attitude of Italian firms towards these strategies.

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GLO Discussion Paper No. 639, 2020

In Times of Trouble: Innovative Drivers of External Competitiveness for Small Businesses during the Great Recession – Download PDF
by
Brancati, Emanuele & Brancati, Raffaele & Guarascio, Dario & Zanfei, Antonello

GLO Fellows Emanuele Brancati & Dario Guarascio

Author Abstract: This paper analyzes the main drivers of external competitiveness in times of crisis for small and medium enterprises (SMEs). We focus on the Italian experience in the midst of the financial and sovereign-debt crisis, and present robust evidence based on a comprehensive survey of Italian companies in the manufacturing and production service sectors (the MET dataset). Overall, our results confirm the high degree of heterogeneity of the Italian system and the differences between internationalized and domestic companies in terms of performance as well as structural and behavioral dimensions. In particular, data highlight not only the strict correlation between internationalization and innovative activities but also a positive change of attitude of Italian firms towards these strategies. Our analysis shows that, whilst structural factors play a key role for external competitiveness, other critical firm-level aspects trigger superior performances, especially strategic profiles, technological capabilities, and proactive behaviors such as innovativeness and R&D investment. Importantly, we document disproportionate effects of innovation for smaller and less productive companies. This points at dynamic strategies as a potential tool to fill the gap between larger/more productive companies and the set of less structured firms, a segment representing an ideal target for policy measures.

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GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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