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Stemming the downturn: How ambidexterity and public policy influence firm performance stability during economic crises

Year: 2021

Type: article

Abstract: A key question confronting policy makers during economic crises is how they can support firms to maintain their performance levels until the economic storm has passed. The present study bridges insights from the ambidexterity and public policy literatures to examine how firm-internal responses (that is, ambidexterity) and external public policy incentives (that is, demand-pull policies) affect the stability of firms’ performance in a recessionary economic context. Using data from private German renewable energy firms at a time following the global financial crisis, we find that only firms with low ambidexterity achieve performance stability in light of demand-pull policies. This research draws attention to the relevance of stability as a policy-relevant performance measure during times of economic crises. Further, we suggest that greater insight into the interplay of managerial and political factors is necessary to enable policy makers to support the stability of certain industries during crises.

Source: European Management Journal

DOI: 10.1016/j.emj.2021.06.002

Authors: Claudia Doblinger, William Wales, Alexander Zimmermann

Institutions: Technical University of Munich, University at Albany, State University of New York, University of Liechtenstein

Language: English

Topic: Innovation and Knowledge Management

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $1,540