Startup Innovation during the Past Economic Crisis

Nabil Abou Lebdi () and Katrin Hussinger
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Nabil Abou Lebdi: CREA, Université du Luxembourg

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: By the notion of creative destruction, a crisis can stimulate entrepreneurship and innovation through reallocation of unproductive assets to new ventures that exploit emerging opportunities. However, a crisis can also hamper innovation by exacerbated credit market imperfections that affect new innovative ventures disproportionately. This study investigates the innovation behavior of German startups founded during the past economic crisis in 2009. Empirical results show that crisis startup foundations in high-tech sectors are less likely to introduce innovations to the market than ventures started in the pre-crisis period. Yet, the degree of novelty of these product or service innovations is significantly higher as compared to products and services introduced by start-ups founded in pre-crisis years. Moreover, we do not find evidence for necessity entrepreneurship in German low-tech industries.

Keywords: creative destruction; economic crisis; entrepreneurship; innovation; startups (search for similar items in EconPapers)
JEL-codes: L26 M13 O31 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:16-27

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