Exploring how innovation strategies at time of crisis influence performance: a cluster analysis perspective

TL;DR

This study investigates how pre-crisis innovation strategies impact company performance during a crisis, using cluster analysis on Italian stock market data to reveal varied performance outcomes.

Contribution

It applies cluster analysis and Voronoi tessellation to analyze the relationship between pre-crisis innovation investments and performance during a crisis, offering new methodological insights.

Findings

Performance response to innovation is not uniform across companies.

Pre-crisis innovation investments influence growth, profitability, and productivity differently.

Cluster analysis reveals distinct groups with varied performance trajectories.

Abstract

This paper analyzes the connection between innovation activities of companies -- implemented before crisis -- and their performance -- measured at time of crisis. The companies listed in the STAR Market Segment of the Italian Stock Exchange are analyzed. Innovation is measured through the level of investments in total tangible and intangible fixed assets in 2006-2007, while performance is captured through growth -- expressed by variations of sales, total assets and employees -- profitability -- through ROI or ROS -- and productivity -- through asset turnover or sales per employee in the period 2008-2010. The variables of interest are analyzed and compared through statistical techniques and by adopting cluster analysis. In particular, a Voronoi tessellation is also implemented in a varying centroids framework. In accord with a large part of the literature, we find that the behavior of the performance of the companies is not univocal when they innovate.