Open Innovation and Resource Flexibility in Times of Crisis: The Roles of Firm Characteristics

Abstract

The covid-19 pandemic has been a global threat and a large number of firms suffered from this grand challenge. This study aims to investigate how firms survive crises by using different strategies and how these strategies influence firms’ performance differently. From the perspective of dynamic capabilities and using survey data collected from 538 companies during the Covid-19 in China, we empirically tested the hypotheses via an ordered probit model. The results indicated that both resource flexibility and open innovation strategies have a positive effect on firm performance in times of crisis. The effect of resource flexibility and open innovation are more significant in firms with a higher level of internationalization. In addition, accounting for the ownership, we found strong evidence that resource flexibility has a more significant and positive effect on state-owned firms than private firms, while open innovation has a more significant and positive effect on private firms than SOEs. This study contributes to the literature in the organizational management area and international business and provides useful insights for managers who wish to maintain organizational resilience in times of global crisis.