Proactive and Reactive Attitude to Crisis: Evidence from European Firms

Objective: The aim of this study is to investigate the behaviour of European firms in the time of the economic crisis in 2008-2009. We analyse the determinants of proactive strategies in the context of innovation and the range of products offered by every firm on the market. Research Design & Methods: Based on a large and representative sample of 14 750 (EFIGE dataset) firms from Austria, Germany, France, Hungary, Italy, Spain and the UK, we estimate the logit model for two measures of proactive strategy: the investment behaviour and the introduction of new products on the market. Findings: We find evidence that the experience of the former crisis by the company is associated with the adoption of proactive behaviour in the case of investments in innovation, and reactive behaviour in the case of the product offer range. Implications & Recommendations: As the public support for innovative investments proved to be rather ineffective, the most promising direction for public policies in the times of crisis are those that facilitate the access to external financing. Contribution & Value Added: Our paper contributes to the development of knowledge on the dynamics of company behaviour in the wake of the economic crisis in 2008, and to the better understanding of the determinants of proactive behaviour of enterprises within the context of rising uncertainty.