Factors Explaining Firm Economic Vulnerability During the 2008 Crisis

The economic crises constitute the most important disruptions in firms' external environment, which have quite negative economic consequences for them, leading to significant reductions of their activities. However, the negative impacts differ significantly among firms, so it is important to identify factors that affect their magnitude at firm level, as they would provide to firms a useful basis for developing strategies for increasing their resilience to crisis. In this study, based on the resource-based view (RBV) of the firm as well as the dynamic-capability view (DCV) as theoretical foundations, we develop a set of research hypotheses concerning the effects of a series of factors on firm overall crisis economic vulnerability as well as crisis vulnerability with respect to several investment categories. We test these hypotheses using Greek firm data for the crisis period 2009-2014. We find evidence for a vulnerability reducing effect of new forms of "organic" workplace organization and human capital endowment, the latter effect particularly for investment in R&D and innovation, a stabilizing effect of a series of dynamic capabilities, a stabilizing effect of export activities, a de-stabilizing role of crisis-induced liquidity restrictions, and a de-stabilizing effect of crisis-induced decrease of overall private and public demand.