Economic performance, export, systemic barriers and equity investments in innovative companies

Abstract

Purpose – This paper attempts to provide insights into the functioning of innovative companies in times of the global financial crisis. In doing so, the following study investigates whether innovations protected companies from the adverse effects of the global recession. On this occasion, the paper analyzes the economic performance of innovative industries in Poland, highlighting institutional and systemic barriers that curb their development. The main purpose of this paper is to clarify whether targeting innovative companies for equity investments proved beneficial during the global financial crisis. Design/methodology/approach – This paper employs the mean return per unit of risk (MRPUR) analysis in order to investigate international portfolio diversification opportunities delivered by targeting innovative companies for equity investments in times of the global financial crisis. The paper also uses interviews and questionnaires to broaden the knowledge about issues related to the functioning of innovative companies. This is motivated by the fact that the research remains under-researched by the reviewed studies. Findings – The paper links innovations in business strategy and production to the ability of companies to resist the global financial crisis. This paper argues that innovative approach to business strategies proved far more profitable for companies than relying on novelties in production. Furthermore, the paper provides strong evidence that innovative companies could contribute to mitigation of the global economic downturn by stimulating the sustainable economic growth in Poland. As far as the main purpose of this paper is concerned, the current study delivers useful and informative insights into the international portfolio diversification processes that assume targeting innovative investees. Practical implications – This paper delivers practical implications for innovative companies, market regulators, policymakers and international investors. Originality/value – The current paper addresses the absence of the academic literature devoted to the analysis of financial performance of the Polish investee companies representing innovative industries. In doing so, this paper advises on changes in regulations that would facilitate further development of innovative companies. Moreover, the paper paints the picture of the investment environment prevailing in the Central European emerging stock market of Poland. Hereto, delivering general insights into the functioning and regulatory framework of the Polish stock market proves useful in assessing the economic and financial development of Poland.