Innovating, exit or both? Strategic responses to crisis revisited from resource redeployment perspective: evidence from China
International Journal of Emerging Markets
ISSN: 1746-8809
Article publication date: 8 August 2022
Issue publication date: 19 March 2024
Abstract
Purpose
Although scholars in strategic management have identified innovating and exit as firms’ two sequential strategic responses to long-run crisis, the potential interdependency has yet remained implicit. Specifically, in the context of Chinese Privately Owned Enterprises (POEs), this study investigates the interrelationship of these two strategic responses during long-run crisis. Building on resource redeployment perspective, the authors propose that firms tend to simultaneously leverage innovating and exit responses.
Design/methodology/approach
The authors use the data from the 2010 Chinese POEs survey to verify how firms in the long-term crisis made strategic responses after the 2008 financial crisis. Besides, the authors utilize Probit regressions as the basic analysis and further employ bivariate Probit regressions to conduct robustness tests.
Findings
This study provides empirical evidence confirming that firms in the long-run period of the crisis tend to adopt both exit and innovating strategies at the same time, that is, the strategy of resource redeployment. Moreover, this study further finds that government subsidies, the degree of marketization and firm’s organizational capability could all accentuate the decision-making of firms’ resource redeployment.
Originality/value
The authors thus contribute to the study of strategic responses to crisis in strategic management by dynamically find out the interdependency of two responses and enrich the research on resource redeployment perspective by identifying three influential positive antecedents, adding to the ongoing investigation on positive drivers of resource redeployment.
Keywords
Acknowledgements
This study is supported by National Natural Science Foundation of China (Grant No. 71672172), Major Program of National Fund of Philosophy and Social Science of China (Grant Nos. 20&ZD059 and 19ZDA078) and Central Guidance Local Science and Technology Development Fund of Department of Science and Technology of Zhejiang Province (Grant No. 2021ZY1004). And we acknowledge using the data based on the Chinese Private Enterprises Survey (CPES), which was conducted by the Privately Owned Enterprises Research Project Team (member organizations include All-China Federation of Industry and Commerce, State Administration for Market Regulation, Chinese Academy of Social Sciences, the China Society of Private Economy, and the United Front Work Department of CCP). Research Center for Private Enterprises at Chinese Academy of Social Sciences (PCPE-CASS) is the authorized organization that manages and issues the survey data. We appreciate the data support from the above organizations. Any political issue caused by contexts is the sole responsibility of the authors.
Citation
Jin, J., Li, S., Chen, Z. and Wang, L. (2024), "Innovating, exit or both? Strategic responses to crisis revisited from resource redeployment perspective: evidence from China", International Journal of Emerging Markets, Vol. 19 No. 4, pp. 868-894. https://doi.org/10.1108/IJOEM-05-2021-0656
Publisher
:Emerald Publishing Limited
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