The impact of the financial crisis on innovation activity of public technology companies: evidence from Germany

This thesis aimed to explore the impact impaired by financial crisis 2008-2009 on innovation activities of public technology firms in Germany. Specifically, the analysis focused on the change in R&D intensity due to the crisis with respect to firm-specific characteristics (size and age). The research also investigated the resulting influence of this change on firms’ market-based performance. Through the longitudinal observation of a panel of 110 German public companies attributable to technology sector, the analysis rejected the suggestions of both pro-cyclicality in R&D investment and positive relationship between R&D intensity and firm value. The following findings were derived: 1) overall, public technology companies tend to persist their innovation investment in spite of the crisis; 2) younger and smaller firms in general are more R&D intensive that older and larger firms, in particular, smaller firms even increased their R&D intensity during the crisis; 3) there are found to be industrial differences in patterns of R&D investment; 4) market value is found to be negatively associated with R&D investment during the crisis. Limitations of the analysis and perspectives for future research are discussed.