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What do firms do during an economic depression? What wider impact does that have? I'm going to a start an evolving thread here to collect together some of the research I find. Please add any studies which you think might be relevant. 1/n
First up is study by Caroline Flammer & @iioannoulbs - finds that during 2007-8 'great depression' firms follow dual strategy: cutting way out of crisis (cutting spending on staff & capital) and investing their way out (spending on R&D and CSR). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2621247 2/n
Firms with more connections to other firms on the eve of a depression (via exec & board interlock) are more likely to survive. This is particularly true for small, cash-poor firms. Connections to cash-rich firms is particularly important for survival https://papers.ssrn.com/sol3/papers.cf 3/n
During great depression productivity fell significantly. Typical explainations (like capacity utilisation) only accounted for about 1/3 of productivity fall. The additional 2/3 could be explained by disappearing firm know-how and routines https://pubs.aeaweb.org/doi/pdf/10.1257/aer.91.2.34
When the 2008 financial crisis hit, Firms with greedy CEOs tend to avoid investing in CSR. This alienated stakeholders leading to short term losses. It also took these firms longer to recover https://journals.sagepub.com/doi/full/10.1177/0149206320902528
And here's another study of innovation - it found during a crisis, firms were more likely to engage in exploratory innovation. This meant they disolved closer links and went in search in most distant opportunities https://journals.aom.org/doi/10.5465/AMBPP.2019.18638abstract
Being part of a multinational helps. This study found that during 2008 crisis, production facilities which were part of a larger firm were more likely to survive than independents (particularly if they had strong vertical production and financing links) https://www.jstor.org/stable/23249920?seq=1#metadata_info_tab_contents
And the way firms are led tends to change. This 36 country study of 20k managers by @JankaStoker & co found that leaders become more directive during the 2008 financial crisis - particularly in manufacturing & high power distance countries https://www.sciencedirect.com/science/article/pii/S1048984317306483?casa_token=xWA9Iwxk-wUAAAAA:FZuISROJU3HBArRXdb4dljNS7H4DL3yqWWpJa7sV-XJKYpdkH4FlldcJ2PJgbzVMYxqZxa0Q
Here's a review of the research on how organizations respond to crises (not just economic crises) and how they can remain resilient https://www.researchgate.net/profile/Trenton_Williams/publication/314119574_Organizational_Response_to_Adversity_Fusing_Crisis_Management_and_Resilience_Research_Streams/links/59e4b86aaca2724cbfe9370b/Organizational-Response-to-Adversity-Fusing-Crisis-Management-and-Resilience-Research-Streams.pdf
Here is a useful review of the startegy management literature on corporate crises by @GAbatecola http://www.ccsenet.org/journal/index.php/ijbm/article/view/0/39178
